News Digest: US economic data pushes treasury yields lower
May 13, 2023
Economic data released in the United States related to employment numbers and consumer inflation revived fears of a slowing economy that pushed Treasury yields lower amidst expectations of the Fed refraining from hiking interest rates further.
A Reuters report suggested that the number of Americans filing for unemployment benefits grew to an 18-month high last week, even as inflation rates rose by their smallest annual levels in more than two years. Labor Department numbers also suggested a slowdown in demand raising the fears of a recession later in 2023 with credit crunch curtailing lending.
The yield on 10-year notes fell five basis points to 3.386% during the week while the Futures showed the probability that the Fed will hike rates again in June. This stood at 10.7%, up from 2.1% soon after the official data was released. Meanwhile, odds over the Fed cutting rates later this year also went up.