Yields on US Treasuries rose early Wednesday morning as concerns about inflationary pressures renewed a sell-off in longer-term government bonds. The yield on the 10-year Treasury note TMUBMUSD10Y, 1.388%, rose one basis point to 1.374%, while the rate of the 2-year note TMUBMUSD02Y, 0.125% fell 0.3 basis points to 0.119%. The yield on the TMUBMUSD30Y 30-year bond, 2,258% rose 4.4 basis points to 2,243%, around its highest level since January last year. Bond prices move inversely to yields. What drives Treasuries? Fed Chairman Jerome Powell said Tuesday in front of Congress that he would clearly communicate when the central bank would consider reducing its asset purchases, pushing ahead the schedule for a reduction in bond purchases and potentially the first interest rate hike. out of your current. range from 0% to 0.25%.
Powell’s comments initially helped contain the rise in bond yields on Wednesday, but traders continued to hike longer-term rates as they acknowledged that the Fed had less control over extended maturity bonds, analysts said. Long-term Treasury rates have risen in weeks amid anticipation that inflationary pressures will materialize later this year, driven by a combination of the reopening of the US economy, repressed consumer spending and expectations. for greater tax relief from Washington. Powell will deliver another round of testimony, this time before a House committee, at 10 am ET. Fed Governor Lael Brainard will give a guest lecture at Harvard at 10:30 a.m. M., while Vice President Richard Clarida will speak at the US Chamber of Commerce at 1pm. M. In US economic data, New Home Sales for January are due at 10 am ET, and are expected to hit an annualized rate of 850,000. What did market participants say? The recent market action suggested “a small increase in confidence today, the Fed anchoring short rates for longer than was feared last week, but the belief that growth raises rates progressively,” said Jim Vogel, interest rate strategist at FHN Financial.