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10-year Treasury yield rises as high as 4.98% ahead of Powell speech

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U.S. Treasury yields rose on Thursday, with the 10-year Treasury reaching a fresh multiyear high as investors awaited remarks from Federal Reserve Chairman Jerome Powell.

At 6:46 a.m. ET, the yield on the 10-year Treasury was up by 6 basis points at 4.953%. It had risen as high as 4.98% earlier in the session, trading at levels last seen in 2007 after first crossing the 4.9% mark on Wednesday. The 2-year Treasury yield was last more than 1.5 basis points higher at 5.233%, hovering at levels last seen in 2006.

Yields and prices have an inverted relationship and one basis point equals 0.01%.

Investors looked to a speech from Fed Chairman Powell as they considered the outlook for interest rates and the economy.

Powell is expected to echo comments from other Fed officials who have indicated that rates will likely remain elevated for longer than previously expected. Investors are also hoping for clues about whether the central bank will hike rates again, a question over which uncertainty has arisen in recent weeks.

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That comes as multiple central bank speakers have suggested that rates may not need to be hiked further and keeping them at their current level would be sufficient to achieve the Fed’s goals of easing inflation and cooling the economy.  Some policymakers have cited tighter financial conditions brought on by surging Treasury yields as a contributing factor.

Fed Governor Christopher Waller said on Wednesday that the central bank was in a position to “wait, watch and see how the economy evolves” before making decisions about interest rates. Waller added that he is considering various data points to assess whether the Fed’s monetary policy moves so far are having the desired impact.

Some recent economic data sparked concerns that rates may go higher still among investors.

Fresh economic data will be released Thursday, when weekly initial jobless claims and September’s existing home sales figures are due.

Source: CNBC

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