Ekonomické zprávy

US bond yields are showing negative dynamics

US Treasury bond yields declined slightly, while investors took a wait-and-see attitude ahead of the publication of the minutes of the February Fed meeting.

The yield on 5-year Treasury bonds fell by 0.3 basis points, reaching 4.170%, while the yield on 30-year bonds was 3.970% (-0.5 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, decreased by 0.9 basis points to 4.695%, while the yield on 10-year bonds fell to 3.950% (-0.3 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 75 basis points.

Against the background of recent strong US data and hawkish statements by Fed policymakers, investors hope that the minutes of the last Fed meeting will provide any clues about the Fed's next steps. Many investors are concerned about the impact of high interest rates on the US economy and fear that further rate hikes could lead to a recession.

At the February meeting, the Fed raised the rate by 0.25%, to a range of 4.5%-4.75%. Since March 2022, the rate has increased by 450 bps in total. Before that, the rate has not been increased since 2018. For two years — from March 2020 to March 2022 — the rate was in the range of 0-0.25%.

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