10- Year Treasury Yield Remains Below 1.5% After Jobs Data

Source: NYSE

U.S. Treasury yields were mostly flat on Thursday morning, after two Federal Reserve officials warned that higher inflation might be around for longer than anticipated.

The yield on the benchmark 10-year Treasury note was barely changed at 1.49% by 4:00 p.m. ET. The yield on the 30-year Treasury bond was 1.4 basis points lower at 2.099%. Yields move inversely to prices. One basis point is 0.01%.

Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman both said on Wednesday that while they believed inflationary pressures would be temporary, they also thought that prices could remain higher for longer than expected, according to a Reuters report.

This comes after Fed Chairman Jerome Powell played down inflation fears, in comments made to Congress on Tuesday, saying that it was "very, very unlikely" the U.S. would see 1970s-style price pressures.

"From the Fed, we're expecting tapering to begin in the fourth quarter of this year and probably the start of rate hikes in the second quarter of 2022, and inflation continuing to run above 2% this year on a year-over-year basis," Kathy Jones, Schwab's chief fixed income strategist, said Thursday. "So that leads us to believe that real yields are too low at this level."

Data out Thursday showed jobless claims totaled 411,000 for the week ended June 19, higher than an estimate of 380,000 from economists polled by Dow Jones.

The Fed's annual bank stress test results are scheduled for release at 4:30 p.m. ET. The test examines how banks fare during various hypothetical economic downturns. After the Fed's results, banks typically announce how much capital they can release in the form of dividends and buybacks.

Auctions are due to be held Thursday for $40 billion of 4-week bills, $40 billion of 8-week bills and $62 billion of 7-year notes.

CNBC's Hugh Son contributed to this market report.

Copyright CNBC
Contact Us