Treasury yields fell early Monday, with traders bracing for more volatility as concerns grow over whether the Federal Reserve will fall behind the curve in anti-money laundering. inflation or not.
What is the yield doing?
Yield on 10-year Treasury note
fell to 1.553%, compared with 1.583% at 3pm ET on Friday. Yields and debt prices move in opposite directions.
Yield on 2-year Treasury note
fell to 0.512% after ending Friday afternoon at 0.522%, its highest 3pm end since March 18, 2020, according to Dow Jones Market Data, as it posted weekly gains biggest since October 2019.
Yield on a 30-year Treasury note
fell to 1.934%, compared with 1.955% on Friday.
What drives the market?
Bonds sold off last week, boosting yields, especially at the short-term end of the curve, as inflation fears remain front and center, amplified by the announcement of the Index. October consumer price numbers on Wednesday showed a much hotter 6.2% than expected. increase year by year, fastest in nearly 31 years.
Bond market volatility is likely to continue to grow, analysts say, potentially sending ripples to other asset markets.
In Treasury markets, the weight of expectations for rate hikes is fueling fears that the Fed will be forced to act aggressively, potentially sparking an economic downturn. As a result, longer-term yields have largely remained flat, while real, or inflation-adjusted, yields have fallen to all-time lows at year-end.
The Fed’s Empire State Index in New York for November is due at 8:30 a.m. ET. This week’s economic calendar includes October retail sales data on Tuesday, along with industrial production.
What are analysts saying?
Steven Barrow, head of G-10 strategy at Standard Bank, in a note.
“It is understandable,” he wrote. “Investors have not only the uncertainty of the monetary tightening process to find the end of the curve, but also the combination of high inflation with signs that growth is slowing. It may be a long time from the fear of stalling inflation that should be every investor’s worst nightmare, but it is likely to continue to maintain high volatility in the bond market and elsewhere. “.
https://www.marketwatch.com/story/treasury-yields-edge-lower-to-kick-off-week-11636979022?rss=1&siteid=rss | Treasury yields are lower than they were at the beginning of the week