US Treasurys

2-year Treasury yields decline as investors assess inflation, earnings

A key short-term U.S. treasury yield fell on Monday as investors looked to earnings reports to assess the impact of persistent inflation and paid close attention to U.K. economic turmoil that has been weighing on global bond markets.

The yield on the policy-sensitive 2-year Treasury dipped by about five basis points to 4.454%. It had reached a 15-year high on Thursday.  The 10-year Treasury yield, meanwhile, was up one basis point at 4.017%.

Yields and prices move in opposite directions and one basis point equals 0.01%.


Investors are looking closely at earnings releases for hints on the impact that inflation and associated interest rate hikes are having on the U.S. economy. After September's inflation reading was hotter than expected, analysts are widely expecting another 75 basis point rate hike from the Federal Reserve in November.

Some fear that the hikes are too much too soon and could cause a recession.

Meanwhile, the U.S. Treasury Department is considering bond buybacks to improve market liquidity, Reuters reported.

Markets also kept a close eye on developments in the U.K. economy, as the newly appointed Finance Minister Jeremy Hunt announced further reversals of planned tax cuts.

The yield on the U.K. 10-year gilt fell to 3.967%, down by around 36 basis points.