Authorities bond yields rise after a weak public sale
The US 10-year Treasury yield rose on Friday morning as investors waited for the latest inflation data.
The benchmark 10-year Treasury note yield rose 6 basis points to 1.672%. The yield on the 30-year government bond rose to 2.394%. The returns move inversely to the prices.
Investors will keep a close eye on the February Personal Consumption Spending Index, which matures at 8:30 a.m. ET and is an important measure of inflation.
The February personal income and expense figures are expected to be released at 8:30 a.m. ET.
The rise in bond yields came after an auction of 7-year bonds showed a weaker appetite for longer-term debt. Thursday’s $ 62 billion auction of 7-year Treasury bills surpassed demand on a sale last month but was still weak, according to a Reuters report.
Yields were also higher after Fed chairman Jerome Powell suggested the central bank would eventually withdraw its support for the economy.
“As we continue to make significant progress toward our goals, we will gradually reduce the amount of treasury and mortgage-backed securities we purchase,” Powell told NPR’s Morning Edition.
Last week Powell suggested that the central bank would make inflation hotter if it helped achieve full and inclusive employment. Recent inflation worries have boosted bond yields as the 10-year government bond yield hit 1.7% last week.
Data released by the Labor Department on Thursday showed that the number of jobless claims filed last week has also fallen below 700,000 since the coronavirus pandemic began just over a year ago.
Christian Keller, head of economic research at Barclays, told CNBC’s “Squawk Box Europe” on Friday that bond yields have “already risen sharply”.
“Much of that was actually made by real returns, so better growth is expected in the future so we think that’s a good thing in principle,” he said.
Keller said he expected “a lot” of inflation in the next few months, but that it was “mostly a transitory phenomenon”.
– CNBC’s Maggie Fitzgerald contributed to this report.