Treasury yields tick higher as traders anticipate the Fed’s next move

Treasury yields ticked higher early Monday as traders anticipated the US central bank’s next move in the face of persistently high inflation.

The yield on the 2-year government bond rose 7 basis points to trade at 3.93% at 06:41 ET, trading around levels not seen since 2007.

The yield on the 10-year Treasury, meanwhile, rose nearly 5 basis points to 3.494%. Interest rates move opposite to prices. One basis point corresponds to 0.01[ads1]%.

The Fed’s two-day meeting is set to begin on Tuesday, with most market participants expecting another 75 basis point increase from the central bank. However, some analysts have argued that the Fed could raise interest rates by a full point, or 100 basis points.

It comes after inflation rose more than expected in August. The consumer price index rose by 0.1% for the month and 8.3% over the past year – higher than economists expected. The data has led investors to expect the Fed to double down on higher interest rates for longer, until rates fall.

— CNBC’s Jeff Cox and Jesse Pound contributed to this report

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