10-year Treasury bonds rose on Wednesday as investors weighed comments from Federal Reserve Governor Lael Brainard awaiting the latest insights into the Federal Reserve’s monetary tightening.
The 10-year Treasury note yield peaked at 2.6125% by 4:30 am ET. This move left the policy rate well above its 2-year counterpart, which was trading at around 2.5714%. The 2-year recently traded above the 10-year, triggering a so-called yield curve inversion.
The US 5-year Treasury yield rose about 6 basis points to 2.7635% and the 30-year Treasury yield rose to 2.6204%, up 4 basis points. Yields move inversely with prices and 1 basis point equals 0.01%.
Brainard, who normally favors loose policy and low interest rates, said the central bank must act quickly to bring inflation down.
“Inflation is way too high and subject to upside risks,” she said in prepared remarks on Tuesday. “The Committee stands ready to take stronger action when inflation indicators and inflation expectations suggest such action is warranted.”
Investors are also awaiting minutes from the latest Fed meeting, due Wednesday afternoon, for clues on the central bank’s plan to tighten monetary policy.
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— CNBC’s Vicky McKeever and Samantha Subin contributed to this market report.