• Tue. Dec 5th, 2023

Investors Assess Economic Prospects as U.S. Treasury Yields Fluctuate


Nov 20, 2023

On Monday, U.S. Treasury yields saw a slight increase as investors weighed the economic outlook and the possibility of an end to the Federal Reserve’s interest-rate hiking cycle. The 10-year Treasury yield rose by less than one basis point to 4.9151%, while the 2-year Treasury yield was up by over three basis points at 4.4764%, up from the 4.379% low it briefly touched on Friday. It’s important to note that yields and prices move in opposite directions and that a basis point is equivalent to 0.01%.

Investors have been considering the economic outlook and the monetary policy of the Federal Reserve, with the hope growing that the central bank is done hiking rates. Last week, both the producer and consumer price index came in lower than expected, suggesting that inflation is easing and the Fed’s interest rate hikes are having the desired effect of cooling the economy. With the Fed due to meet in December, expectations are for interest rates to remain unchanged. Investors are also pondering when the Fed will begin cutting rates, something that Fed officials have not addressed in detail. However, many are hoping this may change based on recent economic data.

This month, investors will be closely watching for any developments from bond markets as they will remain closed on Thursday for Thanksgiving and close early on Friday due to a shortened week

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