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U.S. bond yields eased slightly Friday, after rising for five days, ahead of comments by Federal Reserve chair Jerome Powell, as traders debate whether central bank will refrain from raising interest rates again in June.
What’s happening
-
The yield on the 2-year Treasury
TMUBMUSD02Y,
4.268%
was 4.23%, down 3.7 basis points. -
The yield on the 10-year Treasury
TMUBMUSD10Y,
3.659%
was 3.63%, down 2.5 basis points. -
The yield on the 30-year Treasury
TMUBMUSD30Y,
3.915%
was 3.9%, down 1.1 basis points.
What’s driving markets
On Thursday, the 2-year yield saw its largest yield gain since May 5, as the 10-year yield also rose after comments from Fed officials as well as better-than-expected economic data and indications the U.S. debt ceiling will be raised.
Fed Chair Jerome Powell is due to step up to the microphone at 11 a.m. Eastern in a conversation with former Fed Chair Ben Bernanke. New York Fed President John Williams is due to make remarks as well.
Markets are pricing in a 36% chance of a quarter-point hike in June, up from just 16% a week ago, according to the FedWatch tool from the CME.
“We’ll hear from Fed Chair Jerome Powell and he will probably have some interest in keeping a hawkish rhetoric alive, ultimately adding a bit more pressure on bonds and support to the dollar,” said Francesco Pesole, a currency strategist at ING.
