As investors weigh the economic outlook and the possibility of an end to the Federal Reserve’s interest-rate hiking cycle, U.S. Treasury yields saw a slight increase on Monday. 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%.
It’s important to note that yields and prices move in opposite directions and that a basis point is equivalent to 0.01%. Investors have been considering the economic outlook and the monetary policy of the Federal Reserve, with the hope growing 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 the 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. However, many are hoping this may change based on recent economic data. This month, the Fed’s minutes from the last meeting are set to be released and could provide more insight into the central bank’s considerations and expectations. Bond markets will have a shortened week as they will remain closed on Thursday for Thanksgiving and close early on Friday