Treasury yields drop as supporting unemployed digest data, Fed speaker remarks

February 14, 2023: -On Thursday, U.S. Treasury yields decreased as investors responded to labour data that could indicate a few cooling in the job demand.

The yield on the 10-year Treasury was later down by six basis points at 3.581%. The 2-year Treasury also decrease by just over three basis points to trade at 4.423%.

On Thursday, Weekly jobless claims released increased by 13,000 to 196,000, over anticipated and running contrary to the string of recent data indicating the labour market remained hot. Treasury yields fell following the data as investors bet the job market might be cool enough to prompt the central bank to slow interest rate hikes.

Investors digested remarks from Fed officials throughout the week that provided reenergized insights into their anticipations for the U.S. economy and view monetary policy.

On Wednesday, Fed Governor Christopher Waller indicated that interest rates could be increased by over investors expect. During his outcomes at the Arkansas State University Agribusiness Conference, he suggested that the Fed’s battle with inflation was far from over.

This echoed the tone of other Fed speakers, which include Chairman Jerome Powell and Minneapolis Fed President Neel Kashkari, earlier this week.

The Fed has hiked interest prices eight times since March 2022 as part of its efforts to slow the financial and lower inflation. Many investors are concerned that the speed of rate increases is leading the U.S. economy into a recession and which hope for the Fed to pause rate hikes this year.