The yield on US Treasury bonds rose slightly, while investors continued to assess the prospects for tightening monetary policy to combat high inflation.
The yield on 5-year Treasury bonds rose by 0.6 basis points, reaching 3.14%, while the yield on 30-year bonds was 3.209% (+2.8 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, increased by 0.7 basis points to 3.019%, while the yield on 10-year bonds increased to 3.083% (+1.3 basis points).
Market participants continued to analyze the statements of Fed Chairman Powell made during the two-day hearings in the US Congress. Powell appeared before the Senate Banking Committee on Wednesday, and before the House Financial Services Committee on Thursday.
Powell said yesterday that the regulator's efforts to curb inflation will not necessarily cause weakness in the US labor market, but there is a risk that unemployment in the country may rise from the current level. Last week, the Fed raised the rate by 0.75%, which was the biggest rate hike since 1994. According to the CME FedWatch Tool, markets see a 93,3% chance that the Fed will raise interest rates by 75 basis points in July, up from 88.5% a week ago.
As for the US data, today at 14:00 GMT a report on new home sales for May will be published (economists expect sales to decline to 0.588 million from 0.591 million in April), and the Reuters/Michigan Consumer Sentiment Index for June will also be released (consensus estimates suggest a drop to 50.2 from 58.4 in May).