The yield on US Treasury bonds stabilized on Thursday, while market participants continued to analyze the results of the last meeting of the Federal Reserve System.
The yield on 10-year Treasury bonds fell by 0.4 basis points, reaching 1.842%, while the yield on 30-year bonds was 2.138% (-2.8 basis points).
Yesterday, the yield on 10-year bonds rose above 1.86% after the Fed signaled that it could start raising interest rates at the next meeting, which will be held in March. Meanwhile, Fed Chairman Jerome Powell said that the situation with inflation in the United States worsened after the December meeting. According to him, this may force the Fed to take more aggressive measures to curb price growth, which may mean a more rapid increase in interest rates. "Fed policy will have to react in case of further deterioration of the situation," Powell said. "The resolution of supply problems took longer than expected, increasing the risk that increased inflation rates will be more sustainable."
Powell also noted that labor market conditions correspond to full employment. Thus, the Fed can now raise interest rates and not harm employment, he said.
In addition, the Fed said that the monthly bond purchases in February will amount to only $ 30 billion, indicating that the program may end in March at the same time as the rate hike.
As for the US data, today at 13:30 GMT, GDP data for the 4th quarter and a report on the number of initial applications for unemployment benefits for the past week will be released. It is expected that GDP grew by 5.5% in quarterly terms, and the number of initial applications decreased to 260 thousand compared to 286 thousand a week earlier.
Meanwhile, at 15:00 GMT, a report on the pending home sales for December will be released. According to the forecast, the indicator increased by 0.4% after a decline by 2.2% in November.