What’s happening
- The yield on the 2-year Treasury BX:TMUBMUSD02Y dropped by 1.7 basis points, standing at 4.47%. Remember, yields typically move inversely to prices.
- The yield on the 10-year Treasury BX:TMUBMUSD10Y decreased by 1 basis point and settled at 4.16%.
- The yield on the 30-year Treasury BX:TMUBMUSD30Y also experienced a slight decline of 1.2 basis points, reaching 4.36%.
What’s driving markets
Last week witnessed a remarkable surge of nearly 16 basis points in the yield on the 10-year Treasury.
According to rate strategists at Bank of America, strong economic data in the United States poses potential risks to the stability of the 10-year range. Notably, since 1963, whenever the 10-year yield increased in January, it proceeded to rise in 70% of cases throughout the first quarter. Furthermore, historically, when January’s yield was higher, there was a subsequent increase of 61% through the remaining months of the year.
While today features the release of the New York Fed’s measure of consumer inflation expectations and speeches from Fed Gov. Michelle Bowman and Minneapolis Fed President Neel Kashkari, all eyes will be on Tuesday’s release of the consumer price index.
Economists at Daiwa anticipate that service prices will help offset the downswing in gasoline prices and declining food inflation.
