On Monday, U.S. Treasury yields experienced a slight increase as investors weighed the economic outlook and the possibility of an end to the Federal Reserve’s interest-rate hiking cycle. The 10-year Treasury yield rose by over three basis points to 4.4764%, up from the 4.379% low it briefly touched on Friday. Additionally, the 2-year Treasury yield increased by less than one basis point to 4.9151%.
Investors have been closely monitoring the economic outlook and the monetary policy of the Federal Reserve, with hopes growing that the central bank is done hiking rates. Last week, both the producer and consumer price index came in lower than expected, indicating that inflation is easing and that the Fed’s interest rate hikes are having their desired effect of cooling down the economy. With the Fed set to meet in December, expectations are for interest rates to remain unchanged. However, many investors are also considering when the Fed will begin cutting rates, something that Fed officials have not addressed in detail yet.
This month, investors will be eagerly waiting for the release of the Fed’s minutes from its last meeting, which could provide more insight into its considerations and expectations. Bond markets will have a shortened week this month as they will be closed on Thanksgiving Day and close early on Friday.