US 5-year and 30-year Treasury yields reversed again on Friday morning, fueling fears that a recession might be imminent.
The yield on the 5-year Treasury was up 11 basis points to 2.5318% at 4:30 am ET, while the yield on the 30-year Treasury was up 6 basis points to 2.5144%. The benchmark 10-year Treasury note rose 9 basis points to 2.4189% and the US 2-year Treasury yield rose 10 basis points to 2.3915%.
Yields move inversely with prices and 1 basis point equals 0.01%.
5-year and 30-year yields reversed for the first time since 2006 on Monday.
The more closely watched 2-year and 10-year portions of the yield curve then reversed after the market close on Thursday. Some data providers showed the 2-10 spread technically inverting for a few seconds earlier Tuesday, but CNBC data only confirmed the inversion on Thursday.
Yield curve inversions have historically occurred before recessions as investors sold short-dated Treasuries in favor of longer-dated government bonds, signaling concerns about the health of the economy.
However, economists have cautioned that this indicator does not guarantee a recession and that it may be more than a year after the yield curve inversion before an economic downturn occurs.
In addition to rising inflation amid the Russia-Ukraine war, investors have worried that the Federal Reserve’s plans to raise interest rates potentially more aggressively to combat price pressures could plunge the economy into recession.
Stock picks and investment trends from CNBC Pro:
Richard Koo, chief economist at Nomura Research Institute, told CNBC’s Squawk Box Europe on Friday that he believes the Fed “needs to step up a little to make sure inflation doesn’t spiral wildly out of control, which isn’t particularly good news.” for the future market.”
The non-farm payrolls report for March is due out Friday at 8:30 am ET and strong payrolls data could give the Fed more confidence to maintain its rate-hike plan. Economists expect about 490,000 jobs were added in March, according to the Dow Jones consensus estimate, after 678,000 new jobs were added in February. According to Dow Jones, the unemployment rate is expected to fall from 3.8% to 3.7%.
Additionally, the ISM Manufacturing Purchasing Managers’ Index will be released on Friday at 10:00 am ET.
Developments in the Russia-Ukraine war also remain in focus, with talks between the two countries making little progress so far.
Russian President Vladimir Putin said foreign buyers of the country’s gas will have to pay in rubles from Friday.
There are no auctions on Friday.
— CNBC’s Patti Domm and Sarah Min contributed to this market report.