US government bond yields rose Monday morning as investors turned their focus to inflation data and a Senate testimony from central bank governor Jerome Powell.
The yield on the benchmark index for 10-year government bonds added 2 basis points, and rose to 1.7975% at 04:15 ET. The yield on the 30-year government bond rose 3 basis points to 2.1469%. Interest rates move in reverse to prices and 1 basis point is equal to 0.01%.
Powell̵[ads1]7;s nomination hearing in the Senate is scheduled for 10 a.m. Tuesday. The hearing for Fed Governor Lael Brainard’s nomination for the post of Deputy Governor of the Central Bank will take place at 10 am on Thursday.
The consumer price index for December comes out at 8:30 ET on Wednesday, and last month’s producer price index is set at 8:30 ET on Thursday. Higher inflation readings could cause the Fed to raise interest rates early.
Stephen Isaacs, head of the investment committee at Alvine Capital, told CNBC’s “Squawk Box Europe” on Monday that the Fed has been “hopelessly behind the curve” in its monetary policy moves.
He said that “people were confused that the Fed seemed to be making a huge turnaround, but it’s pretty simple: Powell was waiting to get the job confirmed.”
Isaacs said that forecasts of three or four rate hikes in 2022, followed by three more hikes in 2023, are likely to cause the federal funds rate to reach 2%. Isaacs expected that the 10-year government interest rate would then reach as high as 3%, which he believed could help deal with inflation, but did not think this would “curb growth”.
There are no major data releases on Monday.
Auctions will be held on Monday for $ 60 billion of 13-week bills and $ 51 billion 26-week bills.