Longer-dated Treasury yields ticked higher to start the month on Monday, while short-term rates fell as investors weighed prospects for recession and the pace and scope of future Fed rate increases.What yields are doing
The 2-year Treasury note yield
TMUBMUSD02Y,
2.891%
fell to 2.88% compared with 2.897% at 3 p.m. Eastern on Friday. Yields and debt prices move opposite each other.
The yield on the 10-year Treasury note
TMUBMUSD10Y,
2.661%
was 2.656% versus 2.642% on Friday afternoon.
The 30-year Treasury bond
TMUBMUSD30Y,
3.022%
yielded 3.021%, up from 2.976% late Friday.
What’s driving the market Rising fears of a recession were cited for knocking down yields last week and in August. The 2-year yield moved further above the 10-year rate early last week, deepening an inversion of a measure of the yield curve seen as a reliable recession warning signal.
The Fed last Wednesday ended its two-day policy meeting with another 75-basis-point rate hike in an effort to curb soaring inflation. Fed Chair Jerome Powell said last week that another 75 basis-point move could be considered in September but that the Fed would take a data-dependent, meeting-by-meeting approach to decisions. Powell also warned that the economy would need to see a period of below-trend growth to rein in red-hot inflation and that the path to a so-called soft landing for the economy continued to narrow. The 2-versus-10-year measure of the curve lessened its inversion as rates at the short end fell more sharply as investors scaled back expectations around future Fed rate increases. Federal Reserve Bank of Minneapolis President Neel Kashkari said Sunday that the central bank is still committed to its goal of 2% inflation. However, “We are a long way away” from that goal, he said in an interview on CBS News’ “Face the Nation.” Meanwhile, investors will be paying close attention to economic data, culminating in Friday’s July jobs report. Nonfarm payrolls and other employment data will be parsed for signs a still strong labor market is beginning to show cracks. On Monday, the Institute for Supply Management’s closely watched manufacturing index for July is due at 10 a.m. Data on July construction spend …