{"id":1643,"date":"2023-03-02T17:02:55","date_gmt":"2023-03-02T22:02:55","guid":{"rendered":"https:\/\/embarrdowns.com\/treasury-yields-climb-as-fed-rate-hike-fears-increase\/"},"modified":"2023-03-02T17:02:56","modified_gmt":"2023-03-02T22:02:56","slug":"treasury-yields-climb-as-fed-rate-hike-fears-increase","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/treasury-yields-climb-as-fed-rate-hike-fears-increase\/","title":{"rendered":"Treasury Yields Climb as Fed Rate Hike Fears Increase"},"content":{"rendered":"

Bonds yields have been steadily climbing as investors brace for steeper rate increases by the Federal Reserve. Yields across the Treasury market have been higher by at least 5 basis points following an upward revision to the fourth-quarter unit-labor-costs growth rate. The yield for a 30-year bond increased by up to 8 basis points to reach 4.03%, an increase from the 2023 low of 3.5%, which was seen in[0]<\/a><\/sup> Following the 25-basis-points increase, the yields on 2-year and 10-year Treasury bonds rose. Statements made recently by Federal Reserve officials have increased worries that monetary policy will become even stricter in the future.[1]<\/a><\/sup><\/p>\n

On Tuesday, the benchmark 10-year Treasury yield temporarily rose to 4%, which is a level that has not been sustained for more than 10 years. Yields and prices have a relationship in which one increases as the other decreases; one basis point is equivalent to 0.01%. The returns and costs vary inversely and one basis point is equal to 0.01%.<\/p>\n

According to the CME FedWatch tool, the markets are anticipating that the Federal Reserve will increase its benchmark rate by 25 basis points to a range of 4.75%-5% on March 22 with a 69.4% probability.[1]<\/a><\/sup> The probability of a 50-basis-point increase has increased to 30.6%.[2]<\/a><\/sup> On Wednesday, Neel Kashkari, the President of the Minneapolis Federal Reserve, expressed that he was amenable to the notion of a more significant interest rate rise at the upcoming policy gathering, either “25 or 50 basis points,” yet he has not finalized his decision.[3]<\/a><\/sup><\/p>\n

At the end of February, weekly initial jobless claims in the U.S. stayed below 200,000 for the seventh consecutive week, signaling ongoing labor-market robustness.[4]<\/a><\/sup> Meanwhile, inflation hasn\u2019t come off nearly as much as expected in either the U.S. or the eurozone, with the latter recording an annual CPI inflation rate of 8.5% for last month.[4]<\/a><\/sup> <\/p>\n

The 10-year yield TMUBMUSD10Y +1.68% was at 4.07% on Thursday, up around seven basis points (a basis point is a hundredth of a percent).[5]<\/a><\/sup> Wednesday saw the yield reach 4% for the first time since November 2019, a significant increase from its year-to-date low of approximately 3.37% in mid-January.<\/p>\n

0. <\/span>“Entire Treasury Market Yields at Least 4%, Now Including 30-Year” Bloomberg, 2 Mar. 2023, https:\/\/www.bloomberg.com\/news\/articles\/2023-03-02\/treasury-30-year-yield-tops-4-for-first-time-since-november<\/a><\/a><\/p>\n

1. <\/span>“10-year Treasury yield hits highest level since November” CNBC, 21 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/21\/us-treasury-yields-investors-look-to-key-economic-data-fed-minutes.html<\/a><\/a><\/p>\n

2. <\/span>“10-year Treasury yield heads further above 4% to highest level since November after eurozone inflation data” msnNOW, 2 Mar. 2023, https:\/\/www.msn.com\/en-us\/money\/markets\/ten-year-treasury-yields-move-further-above-4percent\/ar-AA1886ES<\/a><\/a><\/p>\n

3. <\/span>“2-year Treasury Yield Attains 17-year High amid Sustained Fed Rate Hikes” Coinspeaker, 2 Mar. 2023, https:\/\/www.coinspeaker.com\/2-year-treasury-yield-17-year-high\/<\/a><\/a><\/p>\n

4. <\/span>“Inflation data pushed the 10-year Treasury yield above 4%. How much higher can interest rates go?” MarketWatch, 2 Mar. 2023, https:\/\/www.marketwatch.com\/story\/how-much-higher-whats-next-as-10-year-treasury-yield-moves-solidly-above-4-57a9f6c<\/a><\/a><\/p>\n

5. <\/span>“The Bond Market’s Recession Siren Roars Louder as Rates Rise” Barron’s, 2 Mar. 2023, https:\/\/www.barrons.com\/articles\/bond-yield-curve-stock-market-recession-dc77b93f<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Bonds yields have been steadily climbing as investors brace for steeper rate increases by the Federal Reserve. Yields across the Treasury market have been higher by at least 5 basis points following an upward revision to the fourth-quarter unit-labor-costs growth rate. The yield for a 30-year bond increased by up to 8 basis points to reach 4.03%, an increase from the 2023 low of 3.5%, which was seen in[0]<\/a><\/sup> Following the 25-basis-points increase, the yields on 2-year and 10-year Treasury bonds rose. Statements made recently by Federal Reserve officials have increased worries that monetary policy will become even stricter in the future.[1]<\/a><\/sup><\/p>\n

On Tuesday, the benchmark 10-year Treasury yield temporarily rose to 4%, which is a level that has not been sustained for more than 10 years. Yields and prices have a relationship in which one increases as the other decreases; one basis point is equivalent to 0.01%. The returns and costs vary inversely and one basis point is equal to 0.01%.<\/p>\n

According to the CME FedWatch tool, the markets are anticipating that the Federal Reserve will increase its benchmark rate by 25 basis points to a range of 4.75%-5% on March 22 with a 69.4% probability.[1]<\/a><\/sup> The probability of a 50-basis-point increase has increased to 30.6%.[2]<\/a><\/sup> On Wednesday, Neel Kashkari, the President of the Minneapolis Federal Reserve, expressed that he was amenable to the notion of a more significant interest rate rise at the upcoming policy gathering, either “25 or 50 basis points,” yet he has not finalized his decision.[3]<\/a><\/sup><\/p>\n

At the end of February, weekly initial jobless claims in the U.S. stayed below 200,000 for the seventh consecutive week, signaling ongoing labor-market robustness.[4]<\/a><\/sup> Meanwhile, inflation hasn\u2019t come off nearly as much as expected in either the U.S. or the eurozone, with the latter recording an annual CPI inflation rate of 8.5% for last month.[4]<\/a><\/sup> <\/p>\n

The 10-year yield TMUBMUSD10Y +1.68% was at 4.07% on Thursday, up around seven basis points (a basis point is a hundredth of a percent).[5]<\/a><\/sup> Wednesday saw the yield reach 4% for the first time since November 2019, a significant increase from its year-to-date low of approximately 3.37% in mid-January.<\/p>\n

0. <\/span>“Entire Treasury Market Yields at Least 4%, Now Including 30-Year” Bloomberg, 2 Mar. 2023, https:\/\/www.bloomberg.com\/news\/articles\/2023-03-02\/treasury-30-year-yield-tops-4-for-first-time-since-november<\/a><\/a><\/p>\n

1. <\/span>“10-year Treasury yield hits highest level since November” CNBC, 21 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/21\/us-treasury-yields-investors-look-to-key-economic-data-fed-minutes.html<\/a><\/a><\/p>\n

2. <\/span>“10-year Treasury yield heads further above 4% to highest level since November after eurozone inflation data” msnNOW, 2 Mar. 2023, https:\/\/www.msn.com\/en-us\/money\/markets\/ten-year-treasury-yields-move-further-above-4percent\/ar-AA1886ES<\/a><\/a><\/p>\n

3. <\/span>“2-year Treasury Yield Attains 17-year High amid Sustained Fed Rate Hikes” Coinspeaker, 2 Mar. 2023, https:\/\/www.coinspeaker.com\/2-year-treasury-yield-17-year-high\/<\/a><\/a><\/p>\n

4. <\/span>“Inflation data pushed the 10-year Treasury yield above 4%. How much higher can interest rates go?” MarketWatch, 2 Mar. 2023, https:\/\/www.marketwatch.com\/story\/how-much-higher-whats-next-as-10-year-treasury-yield-moves-solidly-above-4-57a9f6c<\/a><\/a><\/p>\n

5. <\/span>“The Bond Market’s Recession Siren Roars Louder as Rates Rise” Barron’s, 2 Mar. 2023, https:\/\/www.barrons.com\/articles\/bond-yield-curve-stock-market-recession-dc77b93f<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":1642,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1643"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=1643"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/1643\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/1642"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=1643"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=1643"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=1643"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}