Yields on US Treasuries will fall from April, the 10-year yield is again under 1.7%
US Treasury yields fell Thursday morning, with the 10-year yield dropping below 1.7% at the beginning of April.
The benchmark 10-year Treasury note yield fell to 1.679% around 3:00 p.m. ET. The yield on the 30-year government bond fell to 2.342%. The returns move inversely to the prices.
Investors juggled a handful of economic data and the aftermath of President Joe Biden’s announcement of a $ 2 trillion infrastructure bill.
Initial unemployment benefits were higher than expected last week, with 719,000 more workers crossing the unemployment line, the Labor Department reported Thursday. The sum compared to the Dow Jones estimate of 675,000 was higher than last week’s revised downward of 658,000.
The main job report for March will be released on Friday, although the stock exchange is closed for Good Friday. Economists estimate that 630,000 jobs were created in March and the unemployment rate fell from 6.2% to 6%, according to the Dow Jones.
A measure of US manufacturing activity rose in March to its highest level in more than 37 years, the Institute for Supply Management (ISM) said Thursday. The index rose from 60.8 in February to 64.7 last month.
Biden presented the infrastructure and economic stimulus package on Wednesday evening. Biden’s plan included spending on transportation, broadband, and affordable housing.
The yield on 10-year government bonds has declined since hitting a 14-month high earlier in the week. The 10-year yield has risen rapidly in recent months due to inflation worries of less than 1% at the start of the year.
Despite market concerns, Fed chairman Jerome Powell has said the central bank will make inflation hotter if it contributes to full employment.
Michael Moran, chief economist at Daiwa Capital Markets America, told CNBC’s “Squawk Box Europe” on Thursday that he believes the Fed will continue to “give some ground” to rising yields. He said this comes with an understanding that “you need to value debt at its equilibrium level and when you have that level of fiscal stimulus your equilibrium rates will be higher than it is now.”
Moran believed that the Fed would continue with its current quantitative easing program and then “roll it back” from next year.
Auctions will be held on Thursday for four-week bills worth $ 40 billion and eight-week bills worth $ 40 billion.