The 10-year U.S. Treasury yield climbed to 2.97% on Thursday morning, after the Federal Reserve raised interest rates by 50 basis points, its biggest hike in more than two decades.
The yield on the benchmark 10-year Treasury note moved 5 basis points higher to 2.9718% at 4:25 a.m. ET. The yield on the 30-year Treasury bond rose 4 basis points to 3.0498%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Treasurys
The Fed announced it was raising its benchmark interest rate by half a percentage point on Wednesday afternoon, which marked its largest single hike since 2000, but was in line with market expectations.
The U.S. central bank also outlined its plans to start reducing its balance sheet in June.
However, Fed Chairman Jerome Powell said a 75-basis-point hike was not something the Federal Open Market Committee was “actively considering.” That saw the 10-year yield fall on Wednesday afternoon.
Freddie Lait, founder and CEO at Latitude Investment Management, told CNBC’s “Squawk Box Europe” on Thursday that the relief rally in markets was understandable, given the concerns that a 75-basis-point rate hike could have been in the cards, especially considering recent comments from the likes of St. Louis Fed President James Bullard.
Nevertheless, Lait said the Fed was still going to continue on its hawkish path of raising rates, in order to return them to around the 3% level in the next six or seven months.
Lait said he therefore thinks that “trend is still in play and it’s likely we see a continuation of the moves that we’ve seen year-to-date from here.”
The 10-year Treasury yield hit 3% on Monday in the lead-up to the meeting, amid concerns that rising inflation and the Fed’s more aggressive hiking of interest rates could slow economic growth.
The benchmark 10-year rate has since softened but remains high, with investors monitoring key pieces of economic data.
On Thursday, weekly jobless claim numbers are due out at 8:30 a.m. ET. The closely watched nonfarm payrolls report is then expected out at 8:30 a.m. ET on Friday morning.
Regarding the Russia-Ukraine war, Pentagon spokesman John Kirby said the Russians have made uneven progress in the Donbas region, following weeks of resupply and repositioning efforts. Nonetheless, the U.S. and its allies are rushing to send additional security assistance amid an intensified Russian assault in eastern and southern Ukraine.
Auctions are scheduled to be held on Thursday for $35 billion of 4-week bills and $30 billion of 8-week bills.
— CNBC’s Holly Ellyatt contributed to this market report.
