Yields rise as Fed's Williams stays patient on rate cuts
By Karen Brettell
July 17 (Reuters) -U.S. Treasury yields rose on Wednesday after New York Federal Reserve President John Williams acknowledged progress in disinflation but said that he wants to see further improvement before cutting interest rates, making the odds of a July rate cut even less likely.
"I would like to see more data to gain further confidence inflation is moving sustainably towards our 2% goal. We've got a few good months now," Williams said in an interview with the Wall Street Journal.
"The Fed is sticking with the messaging that it still wants to see more good data," said Vail Hartman, U.S. rates strategist at BMO Capital Markets in New York. "This did effectively take a July move off the table, but it is still leaving September very much a live meeting."
The odds of a rate cut at the Fed's July 30-31 meeting slipped to 5%, from around 8% on Tuesday, according to the CME Group's FedWatch Tool. A rate reduction by September is seen as having a 98% probability, and a second cut by December is also seen as likely.
Treasury yields have fallen this month as softer jobs data and easing inflation boost the odds of an impending rate cut.
Repositioning for a potential victory by Donald Trump at November's U.S. president election has also ebbed, after sending yields higher on Monday and cause a sharp steepening in the Treasury yield curve.
Analysts say that a Trump presidency could reignite inflation and send yields higher as a result of more pro-business policies, tax cuts and new tariffs.
But Hartman said that the impact of any new policies introduced in a Trump presidency would not be felt in the economic data until the second half of 2024, and would also depend on Republicans controlling Congress.
Trump is seen as the candidate more likely to win the election after surviving an assassination attempt on Saturday. Online betting site PredictIt showed bets of an election win at 67 cents for Trump, up from Friday's 60 cents, with a victory for Joe Biden at 28 cents.
Benchmark 10-year yields US10YT=RR were last up 1 basis point at 4.179%, after dropping to 4.156% earlier on Wednesday, matching Tuesday's low, which was the lowest since March 13.
Two-year yields US2YT=RR rose 2 basis points to 4.463% and are up from 4.409% on Tuesday, the lowest since March 8.
The inversion in the closely watched two-year, 10-year Treasury yield curve US2US10=TWEB widened to minus 29 basis points after reaching minus 22 basis points on Monday, the smallest inversion since January.
The gap between two-year and 30-year yields US2US30=TWEB was at minus 8 basis points, after turning positive on Monday for the first time since January.
Data on Wednesday showed that U.S. single-family homebuilding dropped further in June.
The Treasury will sell $13 billion in 20-year bonds on Wednesday and $19 billion in 10-year Treasury Inflation-Protected Securities (TIPS) on Thursday.
Reporting By Karen Brettell; editing by Philippa Fletcher
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.
