Ekonomické zprávy

US bond yields are showing negative dynamics

The yield on US Treasury bonds declined moderately, while investors took a wait-and-see attitude ahead of the announcement of the results of the Fed meeting.

The yield on 5-year Treasury bonds fell by 4.3 basis points, reaching 3.593%, while the yield on 30-year bonds was 3.612% (-4.9 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, decreased by 1.4 basis points to 4.193%, while the yield on 10-year bonds fell to 3.485% (-4.4 basis points). The curve between the 10-year Treasury yield and the 2-year yield remains inverted, sending a warning that the economy may be falling or has already fallen into recession. Now the gap between 10 and 2 year U.S. debt is 71 basis points.

The Fed will announce the results of the first meeting this year at 19:00 GMT. Economists expect the Central Bank to raise the interest rate by 25 basis points (bps), which will mean a slowdown in the pace of policy tightening. At the same time, investors will be listening carefully to Chairman Powell's comments in search of any signs that the Fed will abandon its aggressively hawkish position. In recent months, concerns have spread among investors that rates will rise too high and too fast, leading to a recession.

Before the announcement of the results of the Fed meeting, investors will focus on the JOLTs job openings report and the ISM manufacturing index, which will be published at 15:00 GMT. The manufacturing sector seems to be already in recession. The latest report on durable goods orders showed a reversal from a simple slowdown in capital goods orders to an outright decline. Combined with the reduction in equipment spending in the GDP report, this is further evidence of a recession in the manufacturing sector. The manufacturing index has consistently declined since August 2022, and reached 48.4 in December. According to forecasts, in January the index fell again, to 48.0.

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