The ten-year U.S. Treasury yield retired on Friday morning, but rose above the 1.4% level after rising to 1.6% in the previous session.
The benchmark 10-year Treasury bill yield fell to 1.489% at 3:30 p.m. ET. The yield on the 30-year government bond fell to 2.276%. Yields move upside down to prices.
On Thursday, the ten-year yield jumped more than 16 basis points to 1.614%, the highest level since February 2020 and more than half a percentage point higher at the end of January.
The move annoyed investors and put pressure on stock markets, with the Nasdaq suffering its worst overnight loss since October.
The rise in 10-year yields used as a benchmark for mortgage rates and car loans was driven by expectations of improved economic conditions for the introduction of coronavirus vaccines, as well as fears of higher inflation.
The U.S. House of Representatives will approve the $ 1.9 trillion Covid relief package by Friday, reaffirming expectations for an economic recovery.
However, Wells Fargo strategists said in a note on Thursday that they said “the chances have increased, the Fed should try to dissuade the higher-level move recently.”
Meanwhile, Hans Mikkelsen, Bank of America’s lending strategy, said that since the summer, economists have “consistently underestimated economic growth to an extent never before seen.”
“There seems to be a real risk that the Fed will not be able to look dovish much longer, and this transition could result in wider credit fragments,” he said.
Looking ahead, data measuring U.S. personal income and spending growth in January will be released on Friday, ET at 8:30 p.m.
January data on personal consumer spending, which tracks changes in the cost of goods and services purchased by consumers and represents the inflation indicator preferred by the Federal Reserve, will also be released at 8:30 p.m.
The University of Michigan is expected to make its final reading on U.S. consumer sentiment on Feb. 10.
There is no need to hold an auction on Friday.
– CNBC Patti Domm and Bob Pisani contributed to the report.