Thursday, February 2, 2023

US yields slide after Fed minutes release

Leech Chuck Mikolaszak

Nuevanew yorkJan 4 – The yield on the benchmark 10-year US Treasury note fell on Wednesday, heading for its longest decline in more than five months, following the release of the minutes of the Federal Reserve’s latest meeting.

* At the Federal Reserve’s monetary policy meeting in December, which resulted in a 50 basis point (bp) rate hike after four consecutive 75 bp rates, all officials agreed with a recession.

* However, he was concerned about any “misperception” in financial markets that his commitment to fighting inflation was somehow starting to wane.

* “The market thinks the Fed is going to blink and do everything they can to say we’re going to get inflation down to 2% and there’s going to be some pain,” Christopher Lanouette, managing director and Fixed Income Manager said. From CIBC private wealth usa

* “It seems the market hasn’t gotten used to the idea yet,” he said.

* Earlier, economic data showed the labor market remained tight in November, despite another report showing the manufacturing sector contracted in December, in case the Federal Reserve continued to raise interest rates longer than expected.

* The yield on the 10-year Treasury note fell 9.2 basis points to 3.700%, the biggest one-day decline since Dec. 13.

* The yield was about to cap its fourth straight session of decline, the longest falling streak since a five-session run that began July 26.

* The yield on the 30-year Treasury note fell 7.7 basis points to 3.814%.

* The closely watched portion of the US Treasury yield curve, which measures the difference between the two-year and 10-year Treasury yields, which is seen as a proxy for economic expectations, stood at -67.4 basis points .

* The two-year US Treasury yield, which moves in step with interest rate expectations, was down 3.3 basis points at 4.372%.

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