Ekonomické zprávy

US bond yields are showing mostly negative dynamics

US Treasury yields were mostly lower, while market participants are preparing for the publication of inflation data that may affect the timing of the Fed's monetary policy easing.

The yield on 5-year Treasury bonds fell by 0.9 basis points, reaching 4.053%, while the yield on 30-year bonds was 4.248% (-1.4 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, rose by 0.6 basis points to 4.492%, while the yield on 10-year bonds fell to 4.077% (-1.1 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 42 basis points.

The US labor market data presented on Friday was seen by investors as a sign that interest rate cuts are on the table for this year. But when they will take place and how many cuts there will be in 2024 remains uncertain. No one expects the Fed to change interest rates at the March meeting, but whether officials hold to their previous rate-cutting outlook is a more open question as the economy keeps outperforming expectations. Last week, Fed Chairman Powell indicated that there probably won't be much time left before policymakers are convinced of the wisdom of cutting rates. Tomorrow's U.S. consumer price data will be the next test of market pricing. The January CPI data was stronger than expected and renewed concerns about how quickly inflation could fall. Despite the strong start of the year, experts believe that the downward trend in inflation will continue. Most likely, the February data will show that although inflation remains depressingly high, the overall trend is not strengthening. Economists expect the overall consumer price index to rise by 0.4% m/m in February - partly due to a jump in gasoline prices - but the annual rate remained at 3.1%. However, the core consumer price index likely eased in February - experts forecasting a monthly increase of 0.3% and a decline in the annual figure to 3.7%.

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