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Treasury returns in focus when investors assess recession risk

The yield on the US 10-year government bond fell to its lowest level in almost two weeks on Thursday as investors continued to assess the likelihood of a recession.

The yield on the 10-year government bond was around 4 basis points lower at 3.117%, while the yield on the 30-year government bond fell 3 basis points to trade at 3.21%. Earlier in the session, the 10-year fell below 3.1%. The yield moves in reverse to prices.

The measures come after central bank governor Jerome Powell told Congress that the US Federal Reserve is “strongly committed”[ads1]; to cooling the sky-high inflation rate. Market participants are increasingly concerned that aggressive monetary tightening could tip the world’s largest economy into a recession.

“In the Fed, we understand the difficulties caused by high inflation,” Powell told the Senate Banking Committee on Wednesday. “We are strongly committed to bringing inflation down again, and we are moving fast to do so.”

Last week, the Fed raised its reference rate by 75 basis points, the largest increase since 1994, but it is believed that aggressive tightening could mean further downward pressure on growth.

On the data front, initial unemployment claims for the week ending June 18 will be released along with figures for the first quarter current account at 8:30 ET on Thursday.

The global S&P index for purchasing managers for flash production for June, the S&P global flash services PMI for June and the composite index for the Kansas City Fed’s production survey for June will all follow a little later in the session.

– CNBC’s Sarah Min & Elliot Smith contributed to this report.

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