U.S. Treasury yields were mixed on Monday as investors digested Friday’s comments from Federal Reserve chief Jerome Powell and fretted over the outlook for interest rates and central bank policy.
At 4:02 a.m. ET, the yield on the 10-year Treasury was over one basis point higher to 4.2357%. The 2-year Treasury yield was last at 4.5917% after having risen by more than two basis points. Meanwhile, the yield on the 30-year Treasury was over one basis point lower to 4.406%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Treasury yields fell on Friday despite Fed Chairman Jerome Powell saying that it would be “premature” to confidently say monetary policy is restrictive enough and to “speculate” about rate cuts. He did not exclude the possibility of rates going higher still “if it becomes appropriate.”
Powell also said that the Fed would maintain its restrictive monetary policy stance until officials are convinced that inflation is on its way back to the central bank’s 2% target.
Many investors have been hoping that the Fed’s interest rate-hiking cycle, which began in March 2022, has come to an end and that the Fed may soon begin cutting rates. They’ve hoping for hints about when rates may be lowered from the central bank’s next meeting on Dec. 12-13.
Markets were last pricing in a 96.4% chance of rates being left unchanged at the upcoming Fed meeting.
Investors also looked ahead to key economic data due throughout the week that could provide hints about whether higher interest rates are having their desired effect of cooling the economy. That includes a series of labor market figures, including JOLTs job openings on Tuesday and ADP’s private sector payrolls report on Wednesday before November’s jobs report is published Friday.
No key data is expected Monday.
