Treasury yields mixed after Fed hit announcement – .

Treasury yields mixed after Fed hit announcement – .

U.S. Treasury yields were mixed on Thursday morning, as investors continued to digest the Federal Reserve’s announcement that it would start cutting its bond purchases.
The benchmark 10-year Treasury bill yield fell less than a basis point to 1.5735% at 5 a.m. ET. The yield on the 30-year Treasury bill rose less than a basis point to 1.9958%. Yields move in the opposite direction of prices and 1 basis point equals 0.01%.
The Fed said on Wednesday it would begin withdrawing its $ 120 billion monthly bond buying program “later this month.”
The central bank is expected to cut its bond purchases by $ 15 billion per month, which means its quantitative easing is expected to end by mid-2022.

However, Gurpreet Gill, global fixed income macro-strategist at Goldman Sachs Asset Management, said on Wednesday that “surprises on the path to the pandemic, inflation, inflation expectations or wage growth could lead to a change. pace and have an impact on the rate outlook. . “

Gill noted that short-term U.S. bond yields rose less than those in other markets following hawkish central bank talks, but said it was because the Federal Open Market Committee said its first rise in interest rate would require a more comprehensive job.

“If inflation remains well above the target in 2022, however, we think the Fed may start to say that the continued weakness in labor supply is structural and hints at increases in rate, ”he said. However, Gill added that if inflation starts to ease, the Fed may wait for a fuller labor market recovery before raising rates.
On Thursday, the Department of Labor is expected to release the number of jobless claims filed last week, at 8:30 a.m. ET. Economists polled by Dow Jones expect the first 275,000 claims to have been filed in the week ending October 30.

The number last week was 281,000, the lowest since the start of the pandemic.

Auctions are scheduled for Thursday for $ 10 billion in 4-week bills and $ 25 billion in 8-week bills.

Pippa Stevens contributed to this market report.


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