US Treasury yields test multi-year highs after jobless claims data; 2-year yield highest since 2008

  • U.S. weekly jobless claims hit 220,000 for the week ending Jan. 13, the Labor Department said. The reading was the lowest level reported by the Labor Department in 45 years.
  • "Over the last 24 hours we had some economic data that came in slightly stronger than expected," said Craig Bishop of RBC Wealth Management.
  • Earlier, the yield on the benchmark 2-year Treasury note hit 2.06 percent, its highest level since Sept. 2008.

U.S. government debt yields rose Thursday after the Labor Department said that the number of Americans filing for unemployment benefits fell to the lowest level in 45 years.

The yield on the benchmark 10-year Treasury note rose to 2.611 percent at 2:51 p.m. ET, while the yield on the 30-year Treasury bond rose to 2.887 percent. Bond yields move inversely to prices.

Earlier, the yield on the benchmark 2-year Treasury note hit 2.06 percent, its highest level since Sept. 2008, when it yielded as high as 2.128 percent. The 10-year note yield hit 2.62 percent, its highest level since March 2017.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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U.S. weekly jobless claims hit 220,000 for the week ending Jan. 13, the Labor Department said. The reading was the lowest level reported by the Labor Department in 45 years. Economists polled by Reuters had been expecting roughly 250,000 jobless claims.

Thursday's economic data added to Wednesday's strong numbers, when the Federal Reserve said that an uptick in utility output carried U.S. industrial production higher.

U.S. industrial production rose 0.9 percent in December versus expectations of a 0.4 percent increase.

The Federal Reserve's so-called Beige Book also revealed that the central bank believes the U.S. economy and inflation are expanding. Multiple Fed districts documented increases in manufacturing and construction, while the body remains optimistic that latent pricing will rise in 2018.

Craig Bishop, vice president of U.S. fixed income at RBC Wealth Management, said that the solid numbers are pushing investors away from debt and back into equities.

"Over the last 24 hours we had some economic data that came in slightly stronger than expected," he said. "We're still in the camp that [rates] will remain relatively well contained ... growth in the economy will remain right around the 2.5 level."

Bishop added that he sees three rate hikes from the Fed in 2018 and expects limited inflation growth.

The spread between two- and 10-year yields hovered around 0.56 percentage point, down from 1.24 points at the start of 2017, though up from lows around 0.5 percentage point earlier in January. The spread is often considered a recession barometer, with higher short-term rates and lower long-term rates suggesting weaker outlook.

CNBC's Christopher Hayes contributed to this report.