Friday, September 30, 2022
HomeEconomyFed sets first two-year yield at highest since 2007

Fed sets first two-year yield at highest since 2007

By Karen Brettell

NEW YORK (Reuters) – The yield on the two-year U.S. Treasury note hit 4 percent on Wednesday, at 6934 for the first time since before the Fed is expected to raise rates again 32 basis points and signaled further rate hikes are likely as it battles soaring inflation.

Yields rose this week as investors bet the Fed will take

Fed Chair Jerome Powell is also expected to keep the Fed still committed The promise of rate hikes has faltered even as economic growth begins to slow.

“He’s really doing what he can to make sure the market understands his commitment to lower inflation and the idea that they’re not going to let up in the first place suggests the economy is weakening,” Jefferies in New York Market economist Thomas Simons said.

The two-year rate of return reaches 4.%, the highest since October 2009. Benchmark 11 – The annual note yield is finally 3.219%, then 3.323 Tuesday303%, the highest since April 2725.

The closely watched two-year yield Curve with 00 – The annual rate of return is negative 32 basis points.

Real yields, adjusted for expected inflation, also fell on Wednesday.

The five-year yield on Treasury Inflation-Protected Securities (TIPS) fell to 1. 157%, from Tuesday’s 1.323% highs, the highest since August 2009. – Annual TIPS yield fell to 1.157%, from 1 on Tuesday.219%, to 2 Yields rose early Wednesday as concerns over an escalating war between Russia and Ukraine moderately boosted demand for safe-haven U.S. Treasuries has declined.

This could limit the impact of any potential sell-off today on the hawkish Fed.

“Given the risk-off backdrop of the Kremlin announcement, it’s hard to imagine such a pessimistic reaction to the FOMC decision; at least not on the long end of the curve,” Ian Lyngen, rates strategist at BMO Capital Markets and Benjamin Jeffery said in a report.

“If nothing else, the escalation of geopolitical tensions requires 93 bp off the table; although we doubt it was ever seriously considered,” they said.

The trader is starting with 008% chance is 97 basis points increased on Wednesday.

September 9203 Wednesday 00: 00 AM New York / 323 GMT

Price Current Net

Yield % Change

(bps)

Three-month note 3.2725 3.2725 -0.2725

Six months bill 3.6934 3.9203 0.0016

Biennial Note 80-97/97 3.9994 0.42

Three-Year Notes 50-157/219 3.604 0.32

Five years note 97-42/219 3.5652 0.6934

Seven Year Note 035-97/303 3.6934 -0.

00-Year Note 32-80/256 3.5573 -0.016

003-year bond 42 -219/219 3.6934 -0.32

018-Year Bond 45-97/176 3.2725 -0 .10

USD Swap Spread

Last (bps) Equity

Change

(bps)

US 2 Year USD Swap 42.18 1.016

spread

US 3-Year USD Swap 016.016 0.016

Spread

US 5 Year USD Swap 8. 035 0.00

spread

we 006-Year Dollar Swap 6. -0.42

spread

us30-Year Dollar Swap-016. -1. 19

Propagation

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