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Dec 20, 2018

Bond Yields at Close Report: Treasury yields rise after Fed hikes rates for the fourth time in 2018

Yun Li,Spriha Srivastava



U.S. government debt yields climbed higher on Thursday as investors digested the fourth rate hike this year from the U.S. Federal Reserve.
The yield on the two-year Treasury bond, the coupon maturity most sensitive to Fed policy expectations, rose four basis points to 2.6706 percent, while the benchmark 10-year Treasury note was two basis points higher at 2.7944 percent. Bond yields move inversely to prices.
On Wednesday, the Fed announced an increase in its benchmark interest rate by a quarter point to a target range between 2.25 to 2.5 percent, in a widely anticipated move.
The move marked the fourth increase this year by the U.S. central bank and the ninth since it began normalizing rates in December 2015. It came despite President Donald Trump's tweets against rate hikes. On Monday, he said "it is incredible" that "the Fed is even considering yet another interest rate hike" amid the turmoil outside of the U.S.
On the data front, investors are likely to closely monitor Philly Fed manufacturing figures for December at around 8:30 a.m. ET, with the latest jobless claims data scheduled for publication at the same time.
Meanwhile, a four-week and an eight-week bill is set to be auctioned by the Treasury on Thursday. Announcements on three-month, six-month, two-year, five-year and seven-year notes are also expected.

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