The yield on US Treasury bonds rose slightly, despite the difficult situation around the Russian-Ukrainian crisis. Usually, in case of escalation of geopolitical tensions, investors actively buy bonds, which are considered as a safe haven asset.
The yield on 10-year Treasury bonds rose by 2.1 basis points, reaching 1.969%, while the yield on 30-year bonds was 2.26% (+0.7 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, rose by 2.3 basis points to 1.61%.
Yesterday, US President Joe Biden announced sanctions against Russia that affect the country's banks, sovereign debt and three people. Meanwhile, the EU and the UK also announced sanctions against Russia against the background of the Russian president's decision to send troops into two breakaway regions of eastern Ukraine.
Analysts warn that the escalation of the situation around Ukraine, namely the invasion of Russia, may force the Fed to reconsider the timing or pace of tightening monetary policy, as tensions have already caused a significant increase in the cost of oil and gasoline and may cause a further increase in the consumer price index. Now the probability of a 0.25% rate increase at the March meeting is 67,3%, while the chances of a 50% rate hike are 32,7%).