Treasury yields rise as traders assess government borrowing plan, Fed meeting
.S. Treasury yields rose Monday to kick off a big week of events including a Federal Reserve monetary policy meeting and the release of key economic data.
The yield on the 10-year Treasury was up about 4 basis points at 4.888%. The 2-year Treasury
yield was trading more than 3 basis points higher at 5.048%. The 30-year Treasury yield added more than 1 basis point to 5.042%.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.438 | 0.038 |
| US3M | U.S. 3 Month Treasury | 5.495 | 0.016 |
| US6M | U.S. 6 Month Treasury | 5.577 | 0.013 |
| US1Y | U.S. 1 Year Treasury | 5.453 | 0.022 |
| US2Y | U.S. 2 Year Treasury | 5.035 | -0.004 |
| US10Y | U.S. 10 Year Treasury | 4.875 | -0.002 |
| US30Y | U.S. 30 Year Treasury | 5.036 | 0.001 |
Yields rose earlier in the day, but gave up most of those gains in afternoon trading after the US Treasury announced its updated borrowing plans. The Treasury said it will borrow $776 billion in the final three months of the year, while strategists at JPMorgan Chase said they expected the announcement to be around $800 billion.
The Fed is set to announce its latest interest rate decision on Wednesday, with markets currently pricing in an over 96% chance that the Fed will keep rates unchanged, according to CME’s FedWatch tool. Investors are hoping for guidance on what’s ahead for monetary policy and whether the central bank is done hiking.
Uncertainty has grown since the last Fed meeting in September, when policymakers suggested one further rate hike this year was likely. However, Treasury yields have spiked since then, with the 10-year Treasury yield rising above 5% last week, prompting several Fed officials to say rates do not need to go any higher as elevated yields effectively work to ease the economy.
This week, several key employment reports are expected, including ADP’s employment change figures and JOLTS job openings on Wednesday, and the September jobs report on Friday. The data will give investors hints about the state of the labor market after last week’s weekly initial jobless claims suggested it may be cooling slightly.
.cnbc.com
