Key Takeaways:
- The yield on the 2-year Treasury rose by 5.9 basis points to 4.712% from Wednesday’s 4.653%.
- This level is the highest since December 12, based on 3 p.m. Eastern time figures from Dow Jones Market Data.
- The yield on the 10-year Treasury was marginally higher at 4.326% compared to Wednesday’s 4.323%.
- Thursday’s level represents the highest for the 10-year rate since November 30.
- However, the yield on the 30-year Treasury dipped by 3 basis points to 4.461% from Wednesday’s 4.491%.
What drove markets
Data released on Thursday showed that weekly initial jobless-benefit claims fell to a five-week low of 201,000 in mid-February, signaling that the labor market remains strong. In addition, a pair of S&P Global business surveys found that the economy expanded at an above-average rate in February. Wall Street is bracing for more strong U.S. economic and inflation data next week.
Meanwhile, Treasury’s $9 billion auction of 30-year Treasury inflation-protected securities, or TIPS, came in rather strong on Thursday, according to Tom di Galoma, co-head of global rates trading for BTIG in New York. The results were in line with the performance that new 30-year TIPS auctions tend to have had, on average, since 2015, he said via phone.
In remarks made on Thursday, Federal Reserve Vice Chair Philip Jefferson, the No. 2 official at the central bank, said that he thinks officials can begin to cut interest rates in 2024. Separately, Philadelphia Fed President Patrick Harker said a near-term rate cut is unlikely.
Analysts Sayings
“Concerns over the persistence of price pressures reignited by the last CPI [consumer-price index] report and the robust labor market (as evidenced by the latest NFP [nonfarm payrolls] as well as today’s initial jobless-claims data) suggest policymakers will not rush with cutting rates, in our view. Our June call holds,” remarked Roman Ziruk, a senior market analyst at global financial-services firm Ebury.