Bond Yields Steady as Investors Analyze Economy and Inflation Readings

Bond yields experienced minimal movement on Thursday as investors eagerly anticipated crucial readings on the economy and inflation. This anticipation followed what may have been the final U.S. interest-rate hike of the current cycle.

Key Details:

• The yield on the 2-year Treasury TMUBMUSD02Y, 4.837% was recorded at 4.84%, reflecting a slight decrease of 1.7 basis points. It’s important to note that yields move in an inverse relationship to prices.
• The yield on the 10-year Treasury TMUBMUSD10Y, 3.876% observed a marginal increase of 1.1 basis points, reaching 3.88%.
• Similarly, the yield on the 30-year Treasury TMUBMUSD30Y, 3.955% saw a modest rise of 1.3 basis points, reaching 3.95%.

Market Influences:

On Wednesday, the Federal Reserve (Fed) made the decision to set rates within a range of 5.25% to 5.5%, a move that financial markets widely interpreted as the peak of the current cycle.

While several experts suggest that the Fed’s rate hikes are complete, they emphasize the importance of monitoring energy and commodity prices, along with core inflation figures. Clifford Bennett, chief economist at ACY Securities, states, “My summation would be that the Federal Reserve should be done, but we still need to keep an eye on rekindling energy and commodity prices, as well as that core inflation number.”

In addition to the awaited U.S. inflation data on Friday, a variety of reports, including second-quarter GDP, weekly jobless claims, durable-goods orders, and the trade balance in goods, are also scheduled. Furthermore, the European Central Bank will announce their rate decision.

Friday holds a more eventful role in the economic calendar, involving crucial indicators such as the PCE price index, the employment cost index, and a rate decision from the Bank of Japan.