U.S. Treasury yields were marginally lower Thursday morning, as investors await the GDP report and continue to digest the Federal Reserve’s latest policy update.
The yield on the benchmark 10-year Treasury note fell by 1.3 basis points to 1.833% at 7:35 a.m. ET. The yield on the 30-year Treasury bond fell by 4.9 basis points to 2.117%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
On Thursday, a reading of U.S. economic growth in the fourth quarter is due to be released at 8:30 a.m. ET.
The 10-year rate surged above 1.86% on Wednesday, after the Fed signaled that it could start raising interest rates in March for the first time in more than three years.
Fed Chairman Jerome Powell said in a post-meeting news conference that he believed that there’s “quite a bit of room” to raise rates without hurting the labor market.
In a post-meeting statement, the Federal Open Market Committee said that with “inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.”
In addition, the FOMC said that the central bank’s monthly bond-buying will proceed at just $30 billion in February, indicating that program is expected to end in March as well at the same time that rates increase.
Bill Smead, chief investment officer at Smead Capital Management, told CNBC’s “Squawk Box Europe” that the “market has been in denial about what we call the ‘inflation wolverine.'”
“They trotted this out in the pandemic, the raising [of] inflation as a way to heal the economy, like a friendly puppy dog and inflation is not a friendly puppy dog,” Smead said.
— CNBC’s Jeff Cox contributed to this market report.
