On Monday, the U.S. Treasury yields experienced a slight increase as investors weighed the economic outlook and evaluated 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%. This was just two days after it had 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, with one basis point equivalent to 0.01%. Investors are considering various factors such as the economy and Federal Reserve monetary policy when making their decisions. There is growing hope among markets that the central bank will finish its interest rate hikes following lower-than-expected readings for both the producer and consumer price index. These readings suggest that inflation is easing and that the Fed’s interest rate hikes are effectively cooling down the economy. It is widely expected that interest rates will remain unchanged at the Fed’s last meeting in December, with investors pondering when the Fed might begin cutting rates. However, Fed officials have not provided any details on this topic yet. Data from the Fed’s last meeting will be released on Tuesday and may provide insight into its considerations and expectations for future actions. No key data is expected on Monday.
It is worth noting that bond markets will be closed on Thursday and will close early on Friday for Thanksgiving Day.
In summary, while U.S Treasury yields saw a slight increase on Monday, investors are closely monitoring economic conditions and Federal Reserve monetary policy before making any investment decisions related to bonds or fixed income securities.