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Friday, January 27, 2023

US Treasury yields rise after Fed’s Waller warns of inflation

November 14 – US Treasury yields rose on Monday after a Federal Reserve official said the central bank would not soften its stance on inflation.

* Benchmark 10-year bonds last week posted their biggest weekly price gain since March 2020 after data showed inflation was much lower than expected in October, boosting hopes the Fed could hike interest rates. Is.

* The 10-year yield rose 4 basis points to 3.867% after falling 33 points last week, its biggest weekly decline in more than two-and-a-half years.

* The two-year yield, which is most sensitive to changes in rate expectations, rose 8 basis points to 4.408%.

* A report showing US inflation cooled in October caused Treasury yields to fall last week.

* Fed Governor Christopher Waller said on Sunday that the October inflation report was “just one data point” after other similar readings would be needed to show that inflation is slowing.

* He acknowledged the Fed could consider slowing the pace of rate hikes at its next meeting, but added that markets should focus on the “end point” of rate hikes, which are still the size of each. is “away” instead. Step.

* There has been a massive sell-off in US bonds this year. treasury index ice BoFA is on track for its worst annual performance on record. If the Federal Reserve signals a slowdown in the pace of interest rate hikes, it could slow the decline in bond prices.

* Interest rate futures markets now forecast a 91% chance of a 50 basis point hike in December. A few weeks back, a 75 basis point hike was a similar possibility.

*The portion of the curve that measures two-year and 10-year paper returns operates at -54 basis points. The difference between the three-month and 10-year yields was -32 basis points.

World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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