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Bond yields slip, key yield curve inversion narrows as investors consider the Fed’s next move
PUBLISHED FRI, JUL 15 20222:27 AM EDTUPDATED 2 HOURS AGO
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Samantha Subin
@SAMANTHA_SUBIN
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Katrina Bishop
@KATRINABISHOP
WATCH LIVE
A key Treasury yield curve inversion narrowed on Friday, after hitting its steepest level since 2000 the previous day.
Yield-curve inversions, or when shorter-term government bonds have higher yields than longer-term ones, are often viewed by markets as signs that a recession is coming.
The gap between the 2-year and 10-year yields shrunk Friday but remained inverted as stocks popped and traders weighed the possibility that the U.S. Federal Reserve will hike interest rates by 75 basis points at its next meeting, not 100 basis points.
“Even though the stock market’s rallying, it’s not all a bed of roses today,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “There are still obvious concerns here with growth as measured looking at 2-10 spread, which of course inverted this week.”
The 2-year yield, which is more sensitive to changes in monetary policy, was last down nearly 2 basis points to 3.124%. The yield on the benchmark 10-year Treasury note fell 3 basis points to 2.926%. Yields move inversely to prices, and a basis point is equal to 0.01%.
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