January 30, 2023: -On Thursday, Treasury yields increased as investors awaited vital inflation figures and assessed the outlook for the U.S. economy following Thursday’s gross domestic report came in better than expected.
The yield on the 10-year Treasury was up by over five basis points to 3.546%. The 2-year Treasury yield traded at 4.216% after rising by around four basis points.
Yields and costs have an inverted relationship, and one basis point equals 0.01%.
Investors awaited the release of the private consumption expenditure price index report on Friday, one of the Federal Reserve’s favoured inflation measures. It reflects the amount consumers spend on goods and services.
The data could affect the Fed’s following interest rate decision, which is expected after its next meeting on February 1. A lot of investors are hoping for the central bank to slow the speed of interest rate hikes further and state a 25 basis point increase then.
Concerns regarding the speed of the rate growth so far, which has led the U.S. economy into a slump, have spread in the latest months.
Investors digested economic data released on Thursday, which included the GDP reading for the last quarter of 2022. It shows that the U.S. economy expanded by 2.9%, just above the 2.8% expected by economists previously surveyed by Dow Jones.
Earnings season also weighed on investors’ minds, with a lot focusing on companies’ guidance on how they anticipate the economy to develop.