On Monday, U.S. Treasury yields saw a slight increase as investors weighed the economic outlook and the possibility of an end to the Federal Reserve’s interest-rate hiking cycle. At 3:31 a.m. ET, the 10-year Treasury yield was over three basis points higher at 4.4764%, up from the 4.379% low it briefly touched on Friday. The 2-year Treasury yield rose by less than one basis point to 4.9151%.
Investors have been considering the economic outlook and the monetary policy of the Federal Reserve, with growing hope that the central bank is done hiking rates. Last week, both the producer and consumer price index came in lower than expected, suggesting that inflation is easing and the Fed’s interest rate hikes are having their desired effect of cooling the economy. With the Fed due to meet in December, expectations are for interest rates to remain unchanged. Investors are also pondering when the Fed will begin cutting rates, something that Fed officials have not addressed in detail yet but many hope may change based on recent economic data.
This month, bond markets will have a shortened week as they will remain closed on Thursday for Thanksgiving and close early on Friday. Additionally, this month also marks a significant event as the Fed’s minutes from its last meeting will be released which could provide more insight into its considerations and expectations moving forward with interest rates and monetary policy decisions