US Treasury bond yields slowed Friday morning as investors further shook off the Federal Reserve’s heightened inflation expectations and earlier than expected rate hike projections.
The benchmark ten-year government bond yield fell 3.1 basis points to 1.482% at 8:05 a.m. ET. The yield on the 30-year government bond fell 1.9 basis points to 2.082%. The returns move inversely to the prices. One basis point is 0.01%.
Yields fell despite the Fed raising inflation expectations on Wednesday after its two-day meeting. The Fed also hinted that a rate hike could happen as early as 2023 after saying in March that there would be no hikes until at least 2024.
In a statement sent to CNBC on Thursday, Fahad Kamal, chief investment officer of Kleinwort Hambros, said that based on the Fed’s policy update and Chairman Jerome Powell’s comments to the press on Wednesday, central banks were still looking to “To remain expansive for the time being”.
He views inflation as temporary in the short term and expects it to decline in 2022 as an aging population, supply chain efficiency and technology-driven productivity gains “put sustained disinflationary pressures”.
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Government bond yields also fell after an unexpected surge in weekly unemployment claims. The Department of Labor reported that the number of unemployment insurance claims filed in the week ending June 12 rose to 412,000, over an estimate of 360,000.
No major data releases or treasury auctions are planned for Friday.