U.S. Treasury yields rose early Wednesday as concerns about the pressure of inflation fueled sales in longer-term government bonds.
What do Treasurys do?
Yield of 10-year financial note TMUBMUSD10Y,
the base point rose to 1.374%, while the 2-year note rate was TMUBMUSD02Y,
margin 0.3 point down to 0.119%. Yield 30-year bonds TMUBMUSD30Y,
an increase of 4.4 basis points to 2.243%, around the highest level since January last year. Bond prices move internally to yield.
What drives Treasurys?
Fed Chairman Jerome Powell said Tuesday in front of Congress that he would clearly communicate when the central bank would consider reducing asset purchases, pushing out the record -time to reduce bond purchases and possibly the first flat rate hike away from its flow. range 0% to 0.25%.
Powell’s comments initially helped introduce an increase in bond yields on Wednesday, but traders continued to push higher long-term levels in recognition that the Fed had less control over bonds with maturities. expanded, analysts said.
Treasury financial time rates have risen in recent weeks amid expectations that inflationary pressures are set to materialize later this year, led by a combination of next -open the U.S. economy, consumer pent-up spending and the prospect of further fiscal relief from Washington.
Powell will give another round of evidence, this time before a House committee, at 10am East. Fed Gov. Lael Brainard plans to deliver a guest speech at Harvard at 10:30 a.m., while Vice President Richard Clarida is slated to deliver a speech to the U.S. Chamber of Commerce at 1pm.
In U.S. economic data, new home sales are expected for January at 10 a.m. ET, and are expected to come in at an annual rate of 850,000.
What did market participants say?
The recent market action suggested “a slight increase in confidence today that the Fed is stacking short rates longer than last week’s fears, but credit growth is pushing rates higher, ”Said Jim Vogel, flat rate strategy at FHN Financial.