(New York = Yonhap Infomax) Reporter Jeong Seon-young = US Treasury prices fell.
2 Year Treasury Yield Tick ChartYonhap Infomax
Although the Chairman of the Federal Reserve Jerome Powell said that he did not expect a rate cut this year, market participants paid attention to the possibility that the result of the turmoil in the banking sector will continue.
As the UK and Swiss central banks also raised interest rates one after the other, bond purchases did not gain much momentum due to the willingness of the central banks to raise interest rates, which have not yet seen sufficient tightening effects in response to inflation.
According to Yonhap Infomax (screen no. 6532), at 8:44 am on the 23rd (hereafter Eastern Time), the 10-year government bond yield in the New York bond market was trading at 3.514%, up 1.80bp from 3:00 on the previous trading day.
The two-year yield, which is sensitive to monetary policy, was 4.005%, up 2.50bp from 3:00 the previous day.
The yield on the 30-year government bond was 3.728%, up 2.60bp from the fight at 3 o’clock.
The gap between the 10-year and 2-year bonds widened slightly from -48.4bp on the previous trading day to -49.1bp.
Treasury yields and prices are moving in different directions.
Market participants are aware of Chairman Powell’s comments that the Fed will not cut rates this year, even as he expects the Fed to end its cycle of rate hikes sooner or later.
Chairman Powell emphasized that banking troubles could tighten credit conditions after the Federal Open Market Committee (FOMC) raised interest rates by 25 basis points the previous day.
If this is true, it is believed that rather than continuing to raise interest rates, he will have to decide whether to raise interest rates in the future while looking at tightening credit.
However, it is expected that there will be no interest rate cut this year despite the banking risk.
Market participants noted that the Fed showed little willingness to cut rates despite uncertainty about the impact of banking issues.
The Bank of England (BOE) and the Swiss National Bank (SNB) also started raising interest rates on the same day.
In a statement published after the Monetary Policy Committee (MPC), the BOE announced that it would raise the benchmark interest rate from 4.0% to 4.25% per annum.
This is in line with market expectations. UK interest rates have reached their highest since October 2008.
The Swiss Central Bank also raised its benchmark interest rate by 50 basis points on the same day.
This is the same move as the European Central Bank (ECB) previously raised its key interest rate by 50 basis points.
US Treasury yields were supportive.
Specifically, the 30-year US Treasury yield hit an intraday high of 3.73%.
The 10-year yield showed limited gains after rising to a level of 3.50%.
The yield on the 2 year Treasury remains at 3.92%.
“The most important message from the Fed meeting is that the evolution of unrest in the banking sector and its impact will be a key factor in determining how much further tightening is needed,” said Matthew Rousetti and other members of Deutsche Bank’s US economics team. “We made it clear that we foresee the potential to put a strain on this economy and replace some further rate hikes,” he said.
“Conversely, if credit conditions do not tighten as expected or if inflation continues to rise surprisingly, the Fed may have to raise interest rates even higher.”
syjung@yna.co.kr
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This article was submitted at 22:34, 2 hours earlier on the Infomax financial information terminal.
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