Clear Rebound Trend in US Treasury Yields... US Treasury to Hold Bond Auctions Starting on the 10th

126 Billion Dollar Bids Over Three Days

[Asia Economy Reporter Byunghee Park] U.S. Treasury yields are showing a clear rebound trend.

According to the Wall Street Journal (WSJ), the yield on the 10-year U.S. Treasury note, which had fallen to 1.173% on the 2nd (local time), rose to 1.316% on the 10th.

Despite various factors such as the spread of the Delta variant, the rise in yields continues as employment and inflation indicators are approaching the monetary policy goals of the central bank, the Federal Reserve (Fed). Expectations are spreading that the Fed will soon begin tapering (reducing asset purchases). The July employment report released by the Department of Labor on the 6th showed a favorable trend, further strengthening the tapering outlook.

Raphael Bostic, President of the Federal Reserve Bank of Atlanta, focused on the increase of 943,000 jobs last month. President Bostic said that if this large-scale job growth trend continues for another one to two months, it would be quite close to the monetary policy goals, and that it is time to consider new monetary policies.

Richard Barkin, President of the Federal Reserve Bank of Richmond, also said that the economic conditions of the Fed are approaching the Fed’s monetary policy goals. President Barkin stated that the inflation target has already been achieved and that employment conditions need to improve a bit more.

The results of the Treasury auctions conducted by the U.S. Department of the Treasury over three days starting from the 10th are expected to influence future interest rate movements. The Treasury plans to auction $58 billion of 3-year Treasury notes on the 10th, $41 billion of 10-year Treasury notes on the 11th, and $27 billion of 30-year Treasury notes on the 12th.

On the 11th and 12th, the July Consumer Price Index (CPI) and Producer Price Index (PPI) will be released. In a Bloomberg survey, Wall Street economists predicted that the core CPI (excluding food and energy items) would rise 4.3% year-over-year, and the core PPI would increase by 5.6%. The June increases were 4.5% and 5.6%, respectively.

Bill Mertz, Chief Bond Investment Strategist at US Bank Wealth Management, predicted that inflation will rise sharply again and could push Treasury yields even higher.

This content was produced with the assistance of AI translation services.