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19 Mar 2015
US Treasury yields recover, short-end yields rise
FXStreet (Mumbai) - The Treasury yields in the US recovered losses, with the yields on the short duration treasury notes turned positive after the sharp sell-off witnessed in the previous session.
Fed June rate hike still on cards
The treasury yields had dropped sharply on Wednesday after the Fed’s Dot chart showed a sharp downward revision of the median 2015 end interest rate forecast. The downward revision of the growth and the inflation forecast also weighed over the yields.
However, the Fed Chairwoman Yellen did say that a rate hike post April cannot not be ruled out, though the decision is data dependent. Thus, yields could have recovered as the markets price-in the possibility of a rate hike in June.
The 2-year yield, which mimics short-term interest rate hike expectations, recovered from the low of 0.532% to trade at 0.585%; up 2 basis points (bps) for the day. Meanwhile, the 10-year yield is down 1.3 bps to 1.936%.
Fed June rate hike still on cards
The treasury yields had dropped sharply on Wednesday after the Fed’s Dot chart showed a sharp downward revision of the median 2015 end interest rate forecast. The downward revision of the growth and the inflation forecast also weighed over the yields.
However, the Fed Chairwoman Yellen did say that a rate hike post April cannot not be ruled out, though the decision is data dependent. Thus, yields could have recovered as the markets price-in the possibility of a rate hike in June.
The 2-year yield, which mimics short-term interest rate hike expectations, recovered from the low of 0.532% to trade at 0.585%; up 2 basis points (bps) for the day. Meanwhile, the 10-year yield is down 1.3 bps to 1.936%.