The yield on the two-year US Treasury is sensitive to the Fed’s monetary policy. It jumped above 4.0% for the first time since 2007 and is above the 10-year and 30-year U.S. Treasury yields.
As of 10:38 p.m. Thai time, the yield on two-year government bonds stood at 4.006%, the highest level since October 2007. The 10-year bond yield was at 3.563% and the 30-year government bond yield was 3.564%.
The surge in 2-year US Treasury yields was driven by forecasts that The US Federal Reserve (Fed) is raising interest rates to curb inflation.
However, short-term bond yields rebounded higher than long-term As a result, the US bond market has an inverted yield curve, signaling a recession.
Investors expect The Fed will raise interest rates by 0.75% at its monetary policy meeting today. and increased by 0.75% at the November meeting. before accelerating, raising interest rates by 0.50% in December
The CME Group’s FedWatch Tool shows investors weighed 84% that the Fed would raise interest rates by 0.75% to 3.00-3.25 percent at its Sept. 20-21 meeting, and weighted 64.3% that the Fed would. Raised interest rates 0.75% to 3.75-4.00% at its meeting on Nov. 1-2, while weighing 46.8% that the Fed will raise interest rates by 0.50% to 4.25-4.50% in its meeting date. 13-14 Dec.
If the Fed raises such interest rates as expected. This will result in the Fed raising interest rates by 0.75% four times in a row in June, July, September and November meetings. Meanwhile, the Fed’s policy rate will hit 4.50% by the end of the year. And it will keep the interest rate above 2.50%, the level the Fed considers neutral. without being too relaxed or too strict