Monday, October 2, 2023

US Treasury yields are nearing August highs as the market awaits the Fed meeting

NEW YORK, Sept 18 (Reuters) – 10-year U.S. Treasury yields traded on Monday just below 16-year highs hit in August, ahead of Wednesday’s Federal Reserve meeting at which the Market expects the central bank to leave interest rates unchanged, although this could signal that it is open to further hikes.

* Rising oil prices have raised concerns that inflation will remain stubbornly high and make it more likely that the Federal Reserve will further tighten monetary policy.

* Last week’s data showed that consumer prices in the United States posted their biggest increase in 14 months in August due to higher gasoline prices.

* “The question is: is inflation rising? If these numbers continue to show strength, will that inevitably keep the Fed on the sidelines? said Tom di Galoma, managing director and co-head of global rates trading at BTIG in New York. York.

* The benchmark 10-year yield was little changed on the day at 4.317%, just below the 4.366% level reached on August 22, the highest since 2007.

* On Wednesday, at the end of their two-day meeting, Federal Reserve officials will release their latest forecasts for the economy and interest rate trends in the coming quarters.

* Federal Reserve funds futures traders are pricing in a 31 percent chance the Fed will raise interest rates by 25 basis points in November and a 42 percent chance it will do so in December, according to CME Group’s FedWatch tool .

* Two-year yields rose three basis points to 5.062%. The yield curve between two- and ten-year bonds was -0.75 basis points.

* U.S. Treasury business volume rose 19% in August from a year earlier, with average daily notional volume of $744 billion, Kevin McPartland, head of research – structure, said in a market and technology team report on Monday the Coalition Greenwich.

* “The increase was driven by the now-standard series of reports on inflation and employment, with recent research presented in Jackson Hole providing an additional boost,” McPartland said.

* The U.S. Treasury will sell $13 billion of 20-year bonds on Tuesday and $15 billion of 10-year Treasury Inflation-Protected Securities (TIPS) on Thursday.

Nation World News Desk
Nation World News Desk
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