The U.S. 10-year Treasury yield rose again on Tuesday after Federal Reserve officials urged caution on the path of interest rate cuts.
After jumping 12 basis points on Monday, the yield on the 10-year Treasury rose more than 2 basis points to 4.206%, a level it has not reached in three months.
Meanwhile, the yield on the 2-year Treasury added less than one basis point to 4.032%.
It is a quiet week on the data front, but a busy week for Federal Reserve commentary, with an array of policymakers delivering speeches.
Rates have actually increased since the Fed cut rates by a half point one month ago.
The U. A. After Federal Reserve officials cautioned about the path of interest rate cuts, the yield on the 10-year Treasury increased once more on Tuesday.
The 10-year Treasury yield increased more than 2 basis points to 4.206 percent, a level it hasn’t hit in three months, after leaping 12 basis points on Monday. In the meantime, the yield on the 2-year Treasury increased to 4.032 percent, which was less than one basis point.
Prices and yields have opposing movements. 0.01% is equivalent to one basis point.
Although there aren’t many data releases this week, a number of policymakers are giving speeches as part of the Federal Reserve’s busy commentary schedule.
Minneapolis Fed President Neel Kashkari stated on Monday that rates may have a higher longer-term trajectory than they have historically, while Dallas Federal Reserve President Lorie Logan stated that lowering rates will require patience.
Following the Fed’s half-percentage-point rate cut in September, Kansas City Fed President Jeff Schmid also stated on Monday that a “cautious and deliberate” approach to rate cuts was appropriate.
Since the Fed’s half-point rate cut a month ago, rates have actually gone up. This gain has been partially attributed to strong economic data, but it has also been influenced by uncertainty about how aggressively the central bank will cut rates going forward.
The market is factoring in a higher likelihood that the Fed will only make one cut during the rest of the year. When the Fed meets again in November, traders predict an 89 percent chance of a quarter-point cut. 7. based on fed funds futures trading, as per the CME’s FedWatch Tool. However, the odds that the Fed will follow through on that with another cut in December are only around one in three, according to the markets.
This report was contributed to by Jeff Cox of CNBC.
