U.S. 2-Year Yield Pulls Back From 15-Month High as 70% December Fed Hike Odds Hold
Updated
Updated · Reuters · Jun 8
U.S. 2-Year Yield Pulls Back From 15-Month High as 70% December Fed Hike Odds Hold
3 articles · Updated · Reuters · Jun 8
Summary
Two-year Treasury yields slipped 0.9 basis points to 4.153% on Monday after touching a 15-month high Friday, while the 10-year yield rose 1.4 basis points to 4.55%.
Friday's stronger-than-expected jobs report lifted fed funds futures to price a 70% chance of a Federal Reserve rate hike by December, easing worries that a softer labor market would block tighter policy.
Wednesday's CPI report is now the next test: economists expect core prices to cool to 0.3% month-on-month in May from 0.4%, but accelerate to 2.9% annually from 2.8%.
Oil-driven inflation fears tied to Iran war supply disruptions are keeping pressure on the outlook, even as some analysts argue the Fed still needs more evidence before resuming hikes.
This week's $119 billion Treasury supply — including $58 billion in three-year notes, $39 billion in 10-year notes and $22 billion in 30-year bonds — adds another near-term focus for the market.