Yield on US Treasury rises after Fed minutes

by Gertrude Chavez-Dreyfus

NEW YORK, Jan 5 (Reuters) – Yields on most US Treasuries rose on Wednesday following the release of minutes from the Federal Reserve’s last monetary policy meeting in December, indicating the possibility of three or more rate hikes this year due to inflation. Gave.

* 2- and 5-year loan returns, reflecting rate hike expectations, rose to their highest levels since March and February 2020, respectively. The 10-year benchmark yield hit its strongest level since April 2021, while the 30-year yield hit a more than two-month high.

* In its minutes for its December meeting, the Fed said it may need to raise interest rates earlier than expected, but also reduce its overall asset holdings to control high inflation.

* The minutes also showed that some participants noted that it may be appropriate to begin reducing the Fed’s balance sheet immediately after the Fed begins to raise the federal funds rate.

David Carter, chief investment officer at Lenox Wealth Advisors, said, “This is news. It is more aggressive than expected. This shift towards aggression could be problematic for both the equity and bond markets. This new shift could put the markets in trouble.” Huh.” New York.

* In the afternoon, the return on the 10-year paper rose to 1,712%, the highest level since the beginning of April 2020. The yield on 30-year debt rose to 2,106%, the highest level since the end of October and the end of the year. day at 2.0838%.

* On the short end of the curve, the 2-year yield hit its highest level since March 2020 at 0.834%, finally rising 6 basis points to 0.8256%.

(Edited in Spanish by Javier Lira and Juana Casas)