The 10-year yield, which is a important barometer for mortgage rates and other financial instrumentshas risen for the past two months as the bond market prepares for the Federal Reserve to start reducing its balance sheet, which it ballooned to almost $9 trillion when the central bank bought bonds during the pandemic.
Investors are also bracing for interest rates to drop at this week’s Fed meeting. rise half a percentage point to a range between 0.75%-1%in addition to the announcement about its plans for its debt portfolio.
Some Fed officials who quantitative tightening could start as early as next month.
10-year yields hit a high of 3.002%, but then traded up 10 basis points at 2.986%.
Returns on 30-year notes also rose to multi-year highs, hitting 3,066%, their highest point since March 2019. They later gained 10 basis points to 3.053%.
Federal funds futures, which track short-term interest rate expectations, reflect at least three hikes of 50 basis points this year and a cumulative total of increases of 248 basis points. For the end of 2022, the market has calculated a fed funds interest rate of 2.8%, compared to 0.33% today.
At the short end of the curve, 2-year yields, which tend to reflect Fed rate expectations, were up about 3 basis points at 2.729%.
Data on Monday showed U.S. manufacturing activity slowed for the second straight month in April, but supply bottlenecks appear to be easing as the pace of input price increases and the backlog of unfinished work moderate. in the factories.
The Institute of Management and Supply (ISM) said on Monday that its national manufacturing activity index fell to 55.4 last month, from 57.1 in March.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
