In parallel, the two-year bond yield, which typically moves in line with interest rate expectations, added 2.8 basis points to 0.898%, after hitting 0.91%, its highest level since March 3, 2020.
A tight labor market and rising inflation have strengthened expectations that the central bank will become more aggressive in raising rates and reducing its balance sheet.
Goldman Sachs expects the Fed to raise rates four times in 2022, compared to its previous forecast of three, in line with analyst opinion at JP Morgan and Deutsche Bank.
Richmond Fed Chairman Thomas Barkin said Monday that the central bank could conceivably raise rates in March, according to the Wall Street Journal.
Meanwhile, US stocks closed with a majority of losses on Monday, but far from their lows for the day, with the Nasdaq starring in a strong rally at the end of the session.
The benchmark that brings together the papers of the main technology companies, gained 0.1% after falling more than 2% on the intraday. “Some investors showed up looking for bargains after the liquidation earlier,” said Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, NJ. The Dow Jones and the S&P 500 fell 0.5% and 0.1%, respectively.
In this context, The dollar index, which measures the greenback’s performance against six pairs, gained 0.2% to 95.993, to stay close to the 16-month high it hit at the end of November.
Investors will be watching inflation data and testimony from Federal Reserve Chairman Jerome Powell and Central Bank Governor Lael Brainard this week for clues about the timing and speed of rate hikes.
December consumer inflation data for the United States will be released on Wednesday, and the headline CPI is forecast to hit 7% yoy, strengthening the case for interest rates rising sooner rather than later.
Source From: Ambito
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