Treasury yields rise ahead of key inflation report

The 10-year US Treasury yield came in at 2.82% on Tuesday morning, its highest level since December 2018.

return on standard 10-year treasury bonds It rose 3 basis points to 2.8205% at 4:15 AM ET. return on 30 year treasury bonds It rose one basis point to 2.8353%. Returns move inversely with prices and one basis point is 0.01%.

The 10-year rate hike comes ahead of key inflation data.

The March CPI is due out at 8:30 AM ET on Tuesday. The data is expected to show an 8.4% annual increase in prices – Highest level since December 1981 – According to economists surveyed by Dow Jones with Expect higher food costs, rents and energy prices To be the main contributors to the rise.

The producer price index for March is due out at 8:30 AM ET on Wednesday.

These inflation readings are key in determining how aggressive the Fed will be in tightening monetary policy.

Rising prices and increasing Fed tightening have investors fearful of a recession on the horizon, as evidenced by the reversal of bond yields. Investors were selling short-term Treasuries in favor of long-term debt, indicating their concerns about the strength of the economy in the near term, even though interest rates returned on Tuesday.

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Nigel Bolton, chief investment officer at BlackRock Fundamental Equities, told CNBC:Squawk Box EuropeOn Tuesday, increased market volatility reflected concerns about central banks making “policy mistakes, and this is spilling over into the 12-18-month global recession.”

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However, Bolton said he doesn’t think a recession is “certainly out of the question.”

Fed Governor Lyle Brainard is scheduled to speak at the Wall Street Journal jobs summit at 12:10 p.m. ET on Tuesday.

In addition to inflation data, the IBD/TIPP Economic Optimism Index for April is due out at 10AM ET on Tuesday.

An auction of 10-year bonds worth $34 billion is scheduled for Tuesday.

Samantha Subin contributed to this market report.

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