Treasury yields rise because the curve stays inverted; traders watch the Fed

US Treasury yields were slightly higher on Monday, but the key yield curve remained inverted, with investors gauging the possibility of a Federal Reserve policy change next week.

At around 6:04 a.m. ET, yielding above the benchmark 10-year Treasury bond increased to 2.963% while the yield above 30-year Treasury bond an increase of 3.117%. Yields move inversely with price.

Distance between 2 years and 10-year yields remain inverted as the market considers the possibility that the Fed will raise rates by 75 basis points at its meeting on July 26 and 27, instead of the more aggressive option of 100 basis points. copy. The 2-year yield was last seen at 3.156%.

Yield curve inversions – when shorter-term government bonds offer higher yields than long-term bonds despite lower risk – are often seen by the market as a sign of an impending recession .

More and more analysts are suggesting that a 100 base points increase The possible interest rates are on the following table Inflation continues to rise more than expected. Fed Governor Christopher Waller said on Thursday that he is in favor of a 75 basis point increase but will keep an eye on the incoming data and could back off a larger move if necessary.

The threat of more aggressive monetary policy tightening required to curb inflation has led to fears of a potential recession, an outcome Fed Chairman Jerome Powell noted last month as a possibility.

On the data front, the NAHB housing market index for July arrives at 10 a.m. ET.

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