10-year Treasury Yield Rises By More Than 2 Basis Points

Investors are awaiting several pieces of data to see if the Federal Reserve will slow down its rate hikes.

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Treasury yields were up during volatile trading on Tuesday morning amid anticipation of data, which should start rolling out on Wednesday. The 10-year Treasury yield was up by just a little more than 2 basis points on Tuesday morning, hitting 3.726 percent.

The 2-year Yield had fallen by more than 2 basis points and was trading at around 4.455 percent by mid-morning.

The third quarter GDP, or gross domestic product, data for the third quarter should be released soon in addition to the latest personal spending and income, manufacturing, and non-farm payroll data. Traders will also be eyeing inflation and job numbers.

Investors are hoping that the Federal Reserve will slow its pace of rate increases. Fed futures point to a 64.5 percent likelihood of a 50 basis-point rate hike at this month’s policy meeting. In addition, futures have priced an 88 percent chance of another hike in February.

On Monday, Richmond’s Federal Reserve’s President Thomas Barkin hinted that he approves of smaller interest rate increases amid the central bank’s war on inflation.

John Williams, New York Reserve president, said that the bank would likely have to continue raising rates for the time being but that cuts could occur in 2024. Williams made the comments at a virtual conference on Monday.

St. Louis Federal Reserve President James Bullard said that rates would likely stay above 5 percent for the next two years.

Investors also sold Treasuries on Tuesday amid anticipation of a corporate bond deal from Amazon. The deal would have 10-year, seven-year, five-year, three-year, and two-year notes.

Wall Street investors have also been busy monitoring developments in China regarding tightened Covid restrictions. The country has been experiencing rising cases of the virus, and citizens have responded by protesting.

But on Tuesday, Chinese officials said that progress was being made with vaccinations, and cases were declining for the first time in a week.


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