On Monday, U.S. Treasury yields saw a slight increase as investors weighed the economic outlook and the possibility of an end to the Federal Reserve’s interest-rate hiking cycle. The 10-year Treasury yield rose by over three basis points to 4.4764%, up from the 4.379% low it briefly touched on Friday. The 2-year Treasury yield also saw a slight rise, increasing by less than one basis point to 4.9151%.
As investors consider their options, they are keeping a close eye on the Federal Reserve’s monetary policy and its impact on inflation and economic growth. Last week, both the producer and consumer price index came in lower than expected, suggesting that inflation is easing and the Fed’s interest rate hikes are having their desired effect of cooling the economy. With the Fed due to meet in December, expectations are for interest rates to remain unchanged, with many hoping this will be a sign that the central bank is done hiking rates for now.
However, there is still uncertainty around when the Fed will begin cutting rates, something that Fed officials have not addressed in detail yet. Nevertheless, recent economic data has suggested that this may happen sooner rather than later, and investors are eagerly awaiting more information about this possibility through upcoming releases of key indicators such as GDP growth figures and employment rates.
In addition to these factors, bond markets will also have a shortened week as they will remain closed on Thanksgiving Day and close early on Friday for Christmas Eve celebrations. This means that investors may need to adjust their strategies accordingly in order to maximize returns before year-end holidays start taking center stage.