US Treasury Yield is Sitting Above 1.7%
Long-term US government bonds continued to sell-off last week and closed above 1.7 percent, according to CNBC.
Yields were already rising but accelerated after the Federal Reserve raised its growth and inflation forecasts last week. The central bank plans to keep short-term interest rates low until at least 2024.
The 10-year Treasury yield closed at 1.73 percent as of Friday. Yields had not held above 1.7 percent since January 2020. 30-year Treasury yields rose to around 2.45 percent last week, the highest mark since 2019.
“We’re coming from historically low . . . interest rates, and some upward movement is healthy,” said Becky Wood, chief executive at Fund Evaluation Group. “It really is the pace of it that could be concerning.”
Tech stocks sold off heavily as investors gauged the impact of higher borrowing costs on growth companies.
“While we welcome these positive developments, no one should be complacent,” Fed chair Jerome Powell, said. “At the Fed, we will continue to provide the economy the support that it needs for as long as it takes.”
Rising inflation erodes the return on fixed-income payments from bonds. “We believe there is room for Treasury yields to rise further,” said Jay Barry, managing director of interest-rate strategy at JPMorgan.