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Friday, January 27, 2023

US Treasury yields rise ahead of CPI and Fed decision

by David Barbusia

Nuevanew yorkDec. 12 – US Treasury bond yields rose on Monday at the start of a busy week for investors that will see new US inflation data and the Federal Reserve’s monetary policy decision.

* Markets expect the US Federal Reserve to hike interest rates by 50 basis points on Wednesday, following four consecutive 75 basis point hikes, as it tries to curb inflation, which has hit multi-decade highs. is on, but without triggering the slowdown.

* Prior to this, investors will focus on the release of the Consumer Price Index (Indian Penal Code) on a November Tuesday.

* “This inflation data is going to be important … Everyone recognizes that the path of inflation is the main driver right now,” said Steven Abraham, a senior managing director at Amherst Pierpont Securities.

* Better-than-expected consumer price data for October fueled a bond price rally last month.

* Expects data from the market Indian Penal Code Shows on Tuesday showed prices rose 7.3% year-on-year in November, which would be a decline from a 7.7% increase last month. The core index, which excludes volatile food and energy prices, is expected to decline from 6.3% to 6.1% in October.

* On Monday, Federal Reserve funds futures traders considered a 93% chance of a 50 basis point hike on Wednesday, while the Fed is going to cut rates in the second half of next year to boost the economy.

* Two Year Treasury Yield that faithfully reflect monetary policy expectations They rose 7 basis points to 4.404%.

* The yield on 10-year bonds rose 5 basis points to 3.614% after an auction of $32 billion of equal-maturity notes.

* The yield curve was deeply inverted comparing the two-year yield to the 10-year yield at -78.6 basis points. A negative spread is considered a harbinger of an upcoming recession.

World Nation News Desk
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