U.S. Treasury yields increased as investors scrutinized the November Fed conference

November 2, 2022: On Monday, Treasury yields increased as markets looked ahead to the Federal Reserve’s November conference, which started on Tuesday.

The 10-year Treasury yield was up by more than two basis points to 4.035%. The yield on the policy-sensitive 2-year Treasury rose by around six basis points to 4.484%. Products and prices have an inverted relationship. One base point equals 0.01%.

Traders expect the Federal Reserve to hike interest rates by 75 basis points this week. This would be the sixth-rate hike of the year, dominated by the central bank’s efforts to curb high inflation.

Markets expect to explain the Federal Reserve’s future policy pathway from the conference. There are concerns that rate hikes are dragging the U.S. economy into a break, and economic data has sent mixed signals about inflation. Questions about how high rates will be hiked in late 2022 and throughout 2023 have grown louder.  

On Friday, the release of the personal consumption expenditures price index reflected that inflation remained strong in September, with the core rate showing an increase of 0.5%, reaching August and 5.1% over the last 12 months.

Meanwhile, the gross domestic development (GDP) report released on Thursday indicated that inflation might be easing as it showed higher-than-expected levels of financial growth.

No significant data departures are expected in the U.S. on Monday. Nevertheless, eurozone inflation and GDP data exist due.