10-year yield notches new 3-year high after surge this week on Fed’s tightening plan

10-year yield notches new 3-year high after surge this week on Fed’s tightening plan

The 10-year rate hit a fresh 3-year high on Friday as investors continued to digest minutes from the previous Fed meeting.

The yield on the benchmark 10-year Treasury note hit above 2.7% Friday morning, while the 2-year rose about 6 basis points to 2.52%. The yield on the 30-year Treasury bond fell 1 basis point to 2.6735%, while the 5-year rate climbed 2 basis points to 2.7181%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Treasurys

The 10-year rate hit a fresh 3-year high on Thursday, at 2.667%, as investors continued to digest minutes from the previous Fed meeting.

The minutes, published Wednesday afternoon, showed that the central bank was planning to shrink its balance sheet by $95 billion a month. In addition, Fed officials indicated that there could be one or more 50-basis-point interest rate hikes on the cards.

This more aggressive tightening of monetary policy, along with rising inflation, has seen yields invert. Investors have been selling out of shorter-dated Treasury in favor of long-dated government debt, indicating concerns about the near-term health of the economy, with fears of a recession on the rise.

In terms of data due out on Friday, February’s wholesale inventory numbers are set to be released at 10 a.m. ET.

Investors also continue to monitor developments on the Russia-Ukraine war.

U.S. Congress has voted to revoke Russia’s trade status, banning oil and gas imports. That followed reports of rape and torture against civilians by Vladimir Putin’s forces, which drew strong condemnation from G-7 members, who voted to remove Russia from the U.N. Human Rights Council.

There are no auctions scheduled to be held on Friday.

CNBC.com staff contributed to this market report.

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