by Karen Brettel
Nuevanew yorkFebruary 7 – US 10-year Treasury yields rose to a four-week high as investors waited to see whether the Federal Reserve chairman would tighten in his speech later in the day following last week’s unexpected jobs data. Let’s take the voice.
Investors interpreted Jerome Powell as taking a more hawkish approach to more rate hikes after the Fed ended its meeting on Wednesday, as he resisted easing financial conditions from being a problem for Fed policy. And spoke of progress in reducing pressure on prices.
But traders again bet on more rate hikes and fewer cuts this year, after data on Friday showed employers added 517,000 jobs in January, far more than economists expected, while the unemployment rate climbed to 3.4%, down from 53. The reading is the lowest in more years.
“There has been a trend over the past year for Federal Reserve spokesmen to magnify the latest data, which certainly, in this case, had strong influence from Friday’s nonfarm payrolls,” said Guy Lebas, strategist. Fixed income for Janie Montgomery Scott in Philadelphia.
* Average hourly earnings rose 0.3% last month after rising 0.4% in December. It cut salaries by 4.4% year-on-year, the smallest increase since August 2021, up from 4.8% in December. But the increment for 2022 has been revised upwards, suggesting a more moderate pace of cooling than previously thought.
* Minneapolis Fed President Neel Kashkari said on Tuesday the Fed would be likely to raise interest rates to at least 5.4% to rein in high inflation, as the January jobs gain showed that monetary policy actions had So far it has done little to make a dent in the labor market.
* The benchmark 10-year bond yield rose to 3.666%, the highest since January 6, and rose from Thursday’s low of 3.333%. The yield on two-year debt stood at 4.452% after hitting 4.493% last Monday, the highest since January 6.
* Federal Reserve funds futures traders expect rates to top 5% in May and fall to 4.79% in December. On Thursday, traders expected the rate to peak at 4.88% in June, before falling to 4.40% in December.
* The Treasury Department will sell $40 billion of three-year bonds on Tuesday, the first part of a $96 billion weekly issuance.