Bond yields fall, cooling after Fed meeting minutes released

Bond yields fell on Thursday, cooling after the previous session’s rise following the release of minutes from the July meeting of the Federal Reserve’s Open Market Committee.

The yield on the benchmark 10-year Treasury was 1 basis point lower at 2.884%, while the yield on the 30-year Treasury was trading around a basis point lower at 3.135%. The yield on the short-term 2-year Treasury note was nearly 5 basis points lower at 3.25%.

Yields move inversely to prices and one basis point is equal to 0.01%.

Minutes released Wednesday said the Fed would continue to raise rates until inflation slows significantly, although the central bank may soon ease its pace of tightening.

“With inflation remaining well above the Committee’s target, participants felt that a shift to a restrictive policy was necessary to meet the Committee’s legislative mandate to promote maximum employment and price stability” , he added. the minutes indicated. The Fed raised rates by 75 basis points at its July 26-27 meeting.

The deliberation came as monetary policymakers around the world try to navigate an environment of both high inflation and signs of an economic slowdown.

“Ultimately, the market continues to view virtually all Fed statements as implying a less hawkish pivot and Wednesday was no exception as the FOMC minutes erased earlier dollar gains and reduced the rise in yields. from the Treasury as equities continue to ignore signals from the money and bond markets that imply the Fed won’t make this hoped-for pivot anytime soon,” wrote Tom Essaye of The Sevens Report.

Home builders say a real estate recession in the United States is already underway, after reporting a weakening in housing demand since June.

Markets are eagerly awaiting Thursday’s job data releases, including a variety of jobless claims as well as home sales numbers.

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