US Treasury Yield Rises Intraday to 1.97%, Approaching the 'Magic Number' 2%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] The yield on the US 10-year Treasury bond surged to 1.97% intraday amid concerns over the Consumer Price Index (CPI) scheduled for release on the 10th, approaching the 2% mark. Attention is focused on whether the Federal Reserve's (Fed) imminent interest rate hike will trigger a significant shift of funds from stocks to bonds.

On the 8th (local time), the US 10-year Treasury yield rose 2.56% from the previous session to 1.965%, reaching as high as 1.97% intraday, the highest level since November 2019.

The rise in Treasury yields was driven by the upcoming release of the US January CPI on the 10th. According to CNBC, market experts expect the US January CPI to increase by 7.2% year-on-year, marking the highest level in 40 years. If the sharp rise in CPI intensifies inflation concerns, it could impact the Fed's planned rate hike in March.

The market is closely watching whether the yield will surpass the so-called "magic number" of 2%. The magic number refers to the Treasury yield level that signals a significant shift of investment funds from stocks to bonds.

Angelo Kourkafas, investment strategist at Edward Jones, told CNBC, "It is encouraging that the market is still absorbing the rise in long-term Treasury yields," adding, "There will continue to be a tug-of-war between strong corporate earnings, solid economic fundamentals, and tight monetary policy."

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