The yield on US Treasury bonds declined moderately, while market participants evaluated the minutes of the January Fed meeting and observed the situation around the Russian-Ukrainian crisis.
The yield on 10-year Treasury bonds fell by 3.5 basis points, reaching 2.01%, while the yield on 30-year bonds was 2.33% (-3.4 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, fell by 4.8 basis points to 1.481%.
The minutes of the Fed's January meeting reported that Fed policymakers discussed raising rates faster than in the past as part of the upcoming policy tightening cycle. "Unlike in 2015, when the FOMC last launched the process of curtailing monetary stimulus, the meeting participants noted much stronger prospects for economic activity growth, significantly higher inflation and a much greater shortage of available resources in the labor market. The majority of participants considered that it would be justified to raise rates faster than it was done after 2015 if the economy as a whole develops in accordance with the expectations of the FOMC," the minutes showed. Economists noted that in general, the minutes did not contain new information signaling that the Fed will tighten policy more aggressively than investors currently expect.
As for the US data, today at 13:30 GMT, data on building permits and housing starts for January will be released. Economists expect that both indicators decreased compared to December - to 1.76 million and 1.7 million respectively. Also at 13:30 GMT, a report on the number of initial applications for unemployment benefits for the past week will be released (according to forecasts, the number of applications amounted to 219 thousand compared to 223 thousand a week earlier).