Yields on US debt jump as Fed starts meeting

Tuesday, 19. March 2019 14:56

Market participants favored stocks on Tuesday, but precious metals also jumped, leaving United States Treasuries on the back foot. Prices of sovereign debt declined, strengthening yields more for longer maturities than in the short term, which means the curve steepened. The Federal Reserve is starting a two-day meeting today and traders have partly penciled in an interest rate decrease for this year. Policymakers have hinted they would reveal a path toward the end of so-called quantitative tightening, the runoff of assets from the central bank's balance sheet. Excessive stimulus could spur inflation.

In other news, German officials expressed willingness to negotiate more on Brexit and delay the March 29 deadline for the United Kingdom's withdrawal from the European Union, which underpinned stocks together with favorable macroeconomic data.

The two-year US note yield was slightly higher at 2.462% at 9:52 am ET. The interest rate equivalent strengthened 1.6 basis points to 2.622% for the 10-year benchmark and 2.3 points for the 30-year bonds, to 3.042%. Prices of corresponding futures were down 0.02%, 0.1% and 0.32%, respectively.

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