The yield on the 10-year Treasury note has reached its highest level since last November.
The yields on U.S. Treasury bonds went up on Tuesday, adding to their big gains in February. Traders are looking at the possibility of higher interest rates and tighter money policies for a longer time.
At 3.955%, the yield on the standard 10-year Treasury note went up by about 3 basis points. Earlier, it reached 3.983%, which was its highest point since November 10. The yield on a 30-year Treasury bond went up by 3 basis points to 3.95 percent.
On Monday, the 2-year yield hit its highest level since November. On Tuesday, it went up a little more to 4.8%. Prices move in the opposite direction of yields.
Tuesday is the last day of business for the month of February. The yield on a 10-year Treasury has gone up by more than 50 basis points this month, and the yield on a 2-year Treasury has gone up by more than 70 basis points.
Recent data shows that inflation is still going strong, so traders are betting more and more that Federal Reserve rates will stay high for longer. The core personal consumption expenditures price index went up 4.7% in January compared to the same month last year, which was better than what was expected. Overall, the PCE index went up by 5.4% from one year to the next, which was also more than expected.
“It’s important to note that yields are much higher now than they were in mid-January.” Because of this, “Treasuries and other conservative assets offer investors competitive returns with less risk than stocks,” said Anthony Saglimbene, the chief market strategist at Ameriprise.
“On the edge, bonds and money market funds are becoming more of a threat to stocks this month.” “We think that this is one of the reasons why equity funds lost money in February.”