The 10-year U.S. Treasury yield topped 2.76% on Monday morning, while the 5-year and 30-year rates remained inverted.
The yield on the benchmark 10-year Treasury note climbed 4 basis points to 2.7629% at 4 a.m. ET on Monday, having hit 2.7741% on Sunday evening. The yield on the 30-year Treasury bond moved 1 basis point higher to 2.7560%, while the 5-year rate jumped 5 basis points to 2.8154%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Treasurys
Treasury yields have been on the rise recently, with concerns that rising inflation and the Federal Reserve’s plans to aggressively tighten monetary policy could slow economic growth.
These fears have caused Treasury yields to invert, with investors selling out of shorter-dated government bonds in favor of long-dated debt, which has historically occurred prior to recessions. However, investors have been careful to point out that the yield curve inversion is not guarantee of a recession and that this signal can flash red as many as two years before an economic downturn takes hold.
Paul Jackson, global head of asset allocation research at Invesco, told CNBC’s “Squawk Box Europe” on Monday that while the effects of rising costs are starting to be felt in the economy, he doesn’t think a recession is in the cards this year.
He expects the global economy to see around 3% growth, rather than the 4% he had previously forecast, but added that he believes recessionary fears are something that “will come back from time to time this year and that we will worry about.”
Cleveland Fed President Loretta Meester told CBS’ “Face the Nation” on Sunday that she still believes the Fed can get inflation under control without causing major damage to the economy.
Two sets of inflation data are due out this week, with the March consumer price index scheduled for release on Tuesday and last month’s producer price index slated to follow on Wednesday.
There are no major economic data releases due out on Monday.
Fed Governor Michelle Bowman is due to give the welcoming remarks at a FedListens session in Nashville, Tennessee, at 9:30 a.m. ET on Monday.
Investors will also be keeping an eye on developments in Ukraine. Russia’s invasion of the country has caused volatility in oil and other commodities markets, which has, in turn, disturbed stocks.
Auctions are scheduled to be held on Monday for $57 billion of 13-week bills, $48 billion of 26-week bills and $46 billion of 3-year notes.
— CNBC’s Jesse Pound contributed to this market report.
