Treasury traders assume that the US economy will experience increased inflationary pressure amid an increase in cases of coronavirus infection.
U.S. 10-year break-even rates - an indicator of expectations of the average inflation rate in the next 10 years - rose to the highest level since November (2.65%). The extra yield on Treasury 10-year notes over 2-years securities also jumped, indicating the bias may be switching back to a steeper yield curve.
According to official data, in November the consumer price index rose by 6.8% per annum, which is the highest value in the last 40 years. Meanwhile, the number of daily cases of coronavirus in the US has reached a new record level, which reduces the likelihood that the supply chain situation will improve in the near future.