{"id":67735,"date":"2023-10-02T06:12:18","date_gmt":"2023-10-02T10:12:18","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/treasury-yields-jump-as-washington-averts-shutdown\/"},"modified":"2023-10-02T06:12:20","modified_gmt":"2023-10-02T10:12:20","slug":"treasury-yields-jump-as-washington-averts-shutdown","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=67735","title":{"rendered":"Treasury yields jump as Washington averts shutdown"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0002566941\" role=\"document\">\n<p>Bond yields rose on Monday after a U.S. government showdown that could have damaged the economy was averted.<\/p>\n<h2>What\u2019s happening<\/h2>\n<ul class=\"articleList\">\n<li>\n      The yield on the 2-year Treasury<br \/>\n        BX:TMUBMUSD02Y<br \/>\n       added 5.4 basis points to 5.108%. Yields move in the opposite direction to prices.<\/p>\n<\/li>\n<li>\n      The yield on the 10-year Treasury<br \/>\n        BX:TMUBMUSD10Y<br \/>\n       rose 4.6 basis points to 4.625%.<\/p>\n<\/li>\n<li>\n      The yield on the 30-year Treasury<br \/>\n        BX:TMUBMUSD30Y<br \/>\n       gained 3.6 basis points to 4.739%.<\/p>\n<\/li>\n<\/ul>\n<h2>What\u2019s driving markets<\/h2>\n<p>Traders had gone into the weekend expecting a U.S. government shutdown that by some analysts estimates could have knocked 0.1 percentage points per week of U.S. GDP growth.<\/p>\n<div class=\"paywall\">\n<p>That may have dampened inflationary pressures and perhaps made it less likely the Federal Reserve would raise interest rates again this cycle. <\/p>\n<p>In the event a temporary budget deal was agreed, averting a government closure for now, and the news helped push benchmark 10-year treasury yields back towards recent 16-year peaks.<\/p>\n<p>Markets are pricing in a 71% probability that the Fed will leave interest rates unchanged at a range of 5.25% to 5.50% after its next meeting on November 1, according to the CME FedWatch tool.<\/p>\n<p>The chances of a 25 basis point rate hike to a range of 5.50 to 5.75% at the subsequent meeting in December is priced at 38%.<\/p>\n<p>The central bank is not expected to take its Fed funds rate target back down to around 5% until October 2024, according to 30-day Fed Funds futures.<\/p>\n<p>U.S. economic updates set for release on Monday include the S&amp;P final manufacturing PMI for September, due at 9:45 a.m. Eastern, followed at 10 a.m. by the September ISM manufacturing survey, and August construction spending.<\/p>\n<p>Fed Chairman Jerome Powell and Philadelphia Fed President Patrick Harker are expected to make comments at a community event in York, Pa at 11 a.m.. New York Fed President John Williams is due to speak at an environmental economics conference at 11:30 a.m., and President of the Cleveland Fed Loretta Mester is slated to talk at 19:30 at the 50 Club of Cleveland.<\/p>\n<p>Japan\u2019s 10-year government bond yield<br \/>\n        BX:TMBMKJP-10Y<br \/>\n       dipped from session highs after the Bank of Japan made an additional purchase of 5 to-10-year bonds to suppress yields. The benchmark Japanese bond yield has climbed to their highest since 2013 as inflation sustains its run of being above the central bank\u2019s 2% target.<\/p>\n<h2>What are analysts saying<\/h2>\n<p>\u201cCongress averted a shutdown, adopting a stopgap bill that keeps the government open through November 17th, meaning data releases (including Friday\u2019s jobs report) will proceed as scheduled,\u201d said Andrew Hollenhorst, economist at Citi in a note to clients.<\/p>\n<p>\u201cThat makes it more likely that Fed officials proceed with a 25bp hike at the November 1st meeting \u2013- which remains our base case. We had been of the view that the consensus was overstating the likelihood of a prolonged shutdown in October, and we now expect a new spending agreement to prevent a shutdown after November 17th (the new deadline),\u201d he added.<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/story\/treasury-yields-jump-as-washington-averts-shutdown-8601982a?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bond yields rose on Monday after a U.S. government showdown that could have damaged the economy was averted. What\u2019s happening The yield on the 2-year Treasury BX:TMUBMUSD02Y added 5.4 basis points to 5.108%. Yields move in the opposite direction to prices. The yield on the 10-year Treasury BX:TMUBMUSD10Y rose 4.6 basis points to 4.625%. The [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1898,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-67735","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Treasury yields jump as Washington averts shutdown | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Bond yields rose on Monday after a U.S. government showdown that could have damaged the economy was averted.What\u2019s happening The yield on the 2-year\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=67735\" 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