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15 Dec 2014
Treasury yields at the short-end rise ahead of the Fed meet
FXStreet (Mumbai) - The Treasury yields at the short-end are seeing a rise, more than the yields at the long-end of the bond market curve as the markets brace up for a possible change in the Fed language with regards to the interest rates.
The yields at the short-end, usually the 2-yr yield, mimic the short-term interest rate expectations, are inching higher. The 2-yr yield is up 2.8 basis points at 0.58%, while the 3-yr yield is up 3.7 basis points at 1.021%. Meanwhile, at the long-end, the 10-yr yield is up 2.1 basis points at 2.124%, while the 30-yr yield has gained 1.3 basis points at 2.77%.
Markets are expecting the Federal Reserve would drop the “considerable time“ when it comes out with its policy statement on Wednesday. With quarterly growth rates at record high and strong labor market recovery, the Fed is more likely to upgrade its rate hike expectations.
The better-than-expected US industrial production data failed to have any significant impact on the Treasury yields so far. Moreover, a strong data may only lead to hardening of yields at the short-end of the market curve.
The yields at the short-end, usually the 2-yr yield, mimic the short-term interest rate expectations, are inching higher. The 2-yr yield is up 2.8 basis points at 0.58%, while the 3-yr yield is up 3.7 basis points at 1.021%. Meanwhile, at the long-end, the 10-yr yield is up 2.1 basis points at 2.124%, while the 30-yr yield has gained 1.3 basis points at 2.77%.
Markets are expecting the Federal Reserve would drop the “considerable time“ when it comes out with its policy statement on Wednesday. With quarterly growth rates at record high and strong labor market recovery, the Fed is more likely to upgrade its rate hike expectations.
The better-than-expected US industrial production data failed to have any significant impact on the Treasury yields so far. Moreover, a strong data may only lead to hardening of yields at the short-end of the market curve.