nuevaNew YorkOctober 28 – US Treasury yields rose on Friday after data showed underlying inflation pressures remained elevated and suggested the Federal Reserve would continue its aggressive campaign to raise interest rates.
* The personal consumption expenditure price index rose 6.2% in the 12 months to September, matching the previous month’s growth. price index PCE Basic, which does not include food and energy, advanced 5.1% annually after rising 4.9% in August.
* “The market reaction is understandable,” said Priya Mishra, head of global rates strategy at TD Securities. “Inflation won’t let the Fed stop anytime soon.”
* Fed funds futures present a 98.4% chance that the Fed will raise the rate by 75 basis points on November 1-2. In the past week, the market has cut expectations that yields will rise to 4.85% in May from around 5% in March 2023.
* Yield on three-month bills and 10-year notes remained negative at -12.3 basis points.
* The yield on the 10-year note rose 2.6 basis points to 3.965%, while the yield on the 30-year loan fell 0.3 basis points to 4.091%.
* Two-year bond yields, which typically move in lockstep with interest rate expectations, rose 4.8 basis points to 4.369%.