Bond yields rose on Thursday, as Fed Chair Jerome Powell repeated a hawkish message on the second day of his European trip.
What’s happening
-
The yield on the 2-year Treasury
TMUBMUSD02Y,
4.770%
was 4.77%, up 5.8 basis points. Yields move in the opposite direction to prices. -
The yield on the 10-year Treasury
TMUBMUSD10Y,
3.748%
was 3.76%, up 5 basis points. -
The yield on the 30-year Treasury
TMUBMUSD30Y,
3.829%
was 3.84%, up 3.4 basis points.
What’s driving markets
Powell in Sintra, Portugal on Wednesday pointed out that the dot plot points to two more rate hikes this year, which financial markets don’t quite accept even though they’re betting that the Fed lifts rates by a quarter point in July.
He largely reiterated that hawkish message in Madrid on Thursday. “In the beginning, there was a little risk of overdoing it and a lot of risk of underdoing it. As you get closer and closer to where you think you’re going to your destination, those risks begin to become more into balance,” said Powell. “I wouldn’t say they’re in balance yet.”
Thursday’s session will feature jobless claims and pending home sales data, alongside a revision to first-quarter GDP numbers.
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