On Monday, the yields on U.S. Treasury bonds experienced a slight increase, as investors evaluated the economic outlook and considered the likelihood that the Federal Reserve’s interest rate hiking cycle had come to an end. At 3:31 a.m. ET, the yield on the 10-year Treasury was over three basis points higher, standing at 4.4764%. Just two days earlier, it had briefly reached a low not seen since September at 4.379%. The 2-year Treasury yield also rose by less than one basis point, reaching 4.9151%.
It is important to note that yields and prices move in opposite directions and that one basis point is equivalent to 0.01%. Investors are considering various factors such as the economy and Federal Reserve monetary policy when making their decisions about bond investments. There are growing hopes that the central bank is finished with interest rate hikes following lower-than-expected readings for both the producer and consumer price index. These lower readings suggest that inflation is easing and the Fed’s interest rate hikes are effectively cooling the economy.
The widespread expectation among markets is that interest rates will remain unchanged at the Fed’s last meeting in December, as investors ponder when the Fed might begin to cut rates. However, Fed officials have not addressed this topic in detail yet. Data from the Fed’s last meeting will be released on Tuesday and could provide insight into the central bank’s considerations and expectations for future policy actions. No key data is expected on Monday, but there will be some economic indicators released later in the week that could impact bond yields moving forward.
It is also worth noting that bond markets will be closed on Thursday and early Friday for Thanksgiving holiday celebrations.
In summary, U.S Treasury yields experienced a slight increase on Monday as investors weighed various factors such as economic outlook and Federal Reserve monetary policy when making their decisions about bond investments