U.S. Treasury yields were mixed early Thursday, as investors continued to consider the Fed’s latest policy decision.
Return on benchmark 10-year Treasury bond fell less than one basis point to 1.4582% at 1:50 a.m. ET. Productivity per 30-year Treasury bond rose less than a basis point to 1,8627%. Yields move inversely with price and 1 basis point equals 0.01%.
Follow it two-day policy meeting, the Fed announced Wednesday that it will buy $60 billion in bonds each month starting in January. This is half the level it bought before the cone in November and $30 billion less than in December.
The Fed cut $15 billion a month in November, double that in December, and will accelerate the reduction even further in 2022.
This would prompt the central bank to end its tapering program in late winter or early spring.
Fed officials expect up to three rate hikes in 2022, according to the central bank’s forecast released on Wednesday.
Ron Temple, co-head of multi-assets and head of US equities at Lazard Asset Management, said on Wednesday that with the economy “shooting all the way down,” the Fed was right to cut the buy your property.
However, he cautioned that the Fed should be “cautious” about when and how quickly interest rates would rise.
Temple explained that the labor market is still “a long way from a full recovery” and that inflation is “below the 90 percent target of the last decade.” As a result, he said the Fed should “avoid taking defeat as a function of victory over a year of uncomfortably high inflation.”
In terms of data due on Thursday, the number of jobless claims filed last week expires at 8:30 a.m. ET.
November’s housing start and construction permit data is also set for release at 8:30 a.m. ET.
Markit’s Quick Purchasing Managers’ Index for December is then expected to appear at 9:45 a.m. ET.
Auctions are scheduled to be held on Thursday for $30 billion in four-week bills and $25 billion in eight-week bills.
– CNBC’s Jeff Cox contributed to this market report.
https://www.cnbc.com/2021/12/16/us-bonds-treasury-yields-are-mixed-as-investors-digest-fed-decision.html Bond yields contrast as investors announce Fed decision