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US Rates Have Backed Up. What Next?
After closing 2023 at 3.88%, the yield on 10-year Treasurys rose as high as 4.15% on Thursday. Two-year Treasurys, often considered to be a reflection of market expectations regarding monetary policy, rose in yield over the same period from 4.25% to 4.33%, and further to 4.38% last night to close out the week. The two-year had traded as low as 4.14% on January 12. These are not the developments you would have expected if markets had kept their trust in the ultra-dovish message that Federal Reserve Chairman Jerome Powell provided on December 13. In particular, does the rise in the two-year yield not suggest that no ... (full story)