10-year Treasury yield edges higher even as U.S. consumer inflation expectations decline
Bond yields were mostly higher on Monday as the U.S. dollar weakened and inflation expectations declined.
The yield on the benchmark 10-year Treasury note gained 3 basis points, trading at 3.353%. The yield on the 30-year Treasury bond was up about 4 basis points at 3.499%.
Meanwhile, The yield on the 2-year Treasury dipped less than 1 basis point to 3.563%. Yields move inversely to prices, and a basis point is equal to 0.01%.
Treasurys
The New York Fed’s Survey of Consumer Expectations showed that in August Americans expected inflation to be 5.7% one year ahead. That is down from 6.2% in July and the lowest reading since October 2021.
As markets saw gains on Friday, with the S&P 500 rising to surpass where it closed on the day Federal Reserve Chair Jerome Powell warned of more pain to come during the Fed’s Jackson Hole meeting, fears of aggressive rate hikes receded among some investors. But while U.S. consumption remains healthy, growth is weak, and economic slowdown globally still has many worried about a recession.
Recent evidence shows the pace of inflation is receding, but consumers are still struggling; according to personal finance website WalletHub, almost a third of Americans are struggling to pay their energy bills.
“We’re getting into treacherous territory here with these rate hikes. … There is a game of chicken now that the Fed is playing with economic activity, and them deciding that they’re not going to slow it too much and the markets worried that they will,” Peter Boockvar of Bleakley Advisory Group said on “Power Lunch.”
In the primary market, auction for the 3-year, 10-year, 3-month and 6-month bills were held on Monday.
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