The US Treasury rose on Thursday as investors assessed the prospects for Federal Reserve interest rate hikes and awaited Friday’s key inflation data.
The 10-year Treasury bond yield was trading at 3.447% as of 7:06 am ET after rising about 4 basis points. It was down as much as 9 basis points on Wednesday. The 2-year Treasury yield was last up around 2 basis points to 4.274%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Concerns over the Fed’s interest rate plans continued as mixed economic data suggested to many investors that interest rates needed to be raised further and would remain high for longer.
The Fed struggled with persistently high inflation throughout 2022, raising interest rates by a total of 375 basis points over the year, including 75 basis points four times in a row. Many investors fear that this pace would send the US economy into recession.
Investors have therefore been scouring the released economic data for clues about the state of the economy and inflation ahead of the next Fed meeting on December 13th and 14th. Then a 50 basis point rate hike is widely expected to be announced.
On the data front, Thursday’s weekly initial jobless claims and Friday’s November PPI data – which measures wholesale inflation – are expected.