On Monday, U.S. Treasury yields rose slightly as investors evaluated the economic outlook and assessed the likelihood that the Federal Reserve’s rate hike cycle had ended. At 3:31 a.m. ET, the 10-year Treasury yield was up by over three basis points at 4.4764%. Only two days prior, it reached a low not seen since September at 4.379%. The two-year Treasury yield also increased by less than one basis point, reaching 4.9151%.
It’s crucial to note that yields and prices move in opposite directions, with one basis point equivalent to 0.01%. Investors are looking at various factors such as the economy and the Federal Reserve’s monetary policy, with hopes growing that the central bank is done raising interest rates after lower-than-expected readings on both the producer and consumer price indexes. These lower readings suggest that inflation is easing and that the Fed’s rate hikes are effectively cooling the economy. There is a widespread expectation among markets that interest rates will be left unchanged at the Fed’s final meeting in December. Investors are mulling when the Fed might start cutting rates, although Fed officials did not elaborate on the issue. Data from the Fed’s latest meeting will be released on Tuesday and could provide insight into the central bank’s deliberations and expectations. No key data is expected on Monday.
Additionally, it’s worth noting that bond markets will be closed on Thursday and will close early on Thanksgiving Friday.