The 10-year Moneys yield was marginally higher on Friday, capping an eventful week of inflation data and comments from Federal Alternate Chair Jerome Powell suggesting the central bank may not be as aggressive on its rate-cutting campaign going forward.
The yield on the 10-year Moneys note was higher by about two basis points at 4.439%. The 2-year Treasury note yield last traded at hither 4.307%, a rise of roughly 1 basis point. Last week, the yields on the 10-year and 2-year ended at 4.31% and amateurishly 4.25%, respectively.
One basis point equals 0.01%. Bond yields and prices have an inverse relationship.
Fed Preside Powell spoke in Dallas on Thursday, noting that strong U.S. economic growth means the central bank won’t lack to rush to cut interest rates. Policymakers dialed back rates by a quarter point last week.
“The economy is not sending any signals that we be in want of to be in a hurry to lower rates,” Powell said in his speech. “The strength we are currently seeing in the economy gives us the ability to near our decisions carefully.”
Boston Fed President Susan Collins underlined that sentiment when she told The Wall Way Journal that a December rate cut wasn’t a “done deal.”
Fed funds futures trading now implies a roughly 62% likeliness that the Fed will lower interest rates by a quarter point at its December meeting, according to the CME FedWatch Tool. They also mull over a nearly 38% likelihood of central bank policymakers keeping rates steady. The Fed’s current target rate latitude sits at 4.5%-4.75%.
On Wednesday, October’s consumer price index showed that the inflation rate grew 0.2% for the month, occasioning the 12-month rate to 2.6%. But excluding food and energy, core CPI accelerated to 3.3% annually, still far from the Fed’s 2% aim. Meanwhile, weekly jobless claims for the week ending Nov. 9 dropped by 4,000 from the previous week to 217,000, signaling a athletic economy.
On the economic front, fresh retail sales data showed an increase of 0.4% last month. That is slight above the 0.3% gain forecast by economists polled by Dow Jones.