US Treasury Yield Curve Inverts, Raising Concerns of Recession and Unfinished Inflation Fight
The US Treasury yield curve has inverted, with the 3-month T-bill rate falling slightly to 5.03%, while the 10-year Treasury yield rose 2 basis points to 3.43%. This indicates that the Federal Reserve's fight against inflation remains unfinished and there are growing risks of a recession. The yield on the 2-year Treasury note also climbed 5 basis points to 4.06%, up almost 30 basis points over the past four trading days. Additionally, the iShares 20+ Year Treasury Bond ETF remained flat on the day.
Treasury yields have been rising, with the 10-year yield returning to 3.45% and the two-year yield rising to 4.05%. The closely-watched consumer price index report for March is due on Wednesday, with economists predicting a rise of 0.3% from February, while core CPI is expected to gain 0.4% sequentially. This data is likely to give the final impetus to market expectations around the Fed's monetary policy direction.
Wednesday will also see the release of the Fed's meeting minutes. Analysts are looking closely at inflation data, with the CPI inflation report due at 8:30 a.m. Sorry, there is not enough context to rewrite this text. Please provide more information. In March, economists predict a 0.3% increase in the consumer price index, resulting in a decrease in the annual CPI inflation rate from 6% in February to 5.2%. However, core CPI, which excludes food and energy, is seen up 0.4% vs. February, pushing the core CPI inflation rate to 5.6%, up slightly from February's 5.5%.
Investors are waiting for this week's inflation outlook and the consumer price index data. According to the CME FedWatch tool, the markets have factored in a 72.4% chance of the Fed increasing interest rates by 25 basis points, bringing them to between 5% and 5.25%, on May 3. After the release of the employment statistics, attention has now turned to the upcoming US CPI figures set to be announced on Wednesday. It is projected that the annual headline CPI will be 5.6%, compared to the previous 5%.
0. “Futures: Market Fades, But These Stocks Flash Buy Signals” Investor's Business Daily, 12 Apr. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-market-rally-fades-4-stocks-flash-buy-signals-cpi-inflation-report-due