Bond yields pause as Bank of America says range may be shifting due to economic reports

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Bond yields paused Monday after the benchmark 10-year backed up last week.

What’s happening

  • The yield on the 2-year Treasury
    BX:TMUBMUSD02Y
    was 4.47%, down 1.7 basis points. Yields move in the opposite direction to prices.

  • The yield on the 10-year Treasury
    BX:TMUBMUSD10Y
    was 4.16%, down 1 basis points.

  • The yield on the 30-year Treasury
    BX:TMUBMUSD30Y
    was 4.36%, down 1.2 basis points.

What’s driving markets

Last week, the yield on the 10-year Treasury rose by nearly 16 basis points.

Rate strategists at Bank of America said there are risks the 10-year range is shifting higher due to strong U.S. economic data. They also noted that when the 10-year yield rises in January — it rose 3.3 basis points during the first month of 2024 — it has gained the rest of the first quarter 70% of the time since 1963. And when January was higher, February through the rest of the year rose 61% of the time.

Monday will see the release of the New York Fed’s measure of consumer inflation expectations, as well as speeches from Fed Gov. Michelle Bowman and Minneapolis Fed President Neel Kashkari, but the focus will be Tuesday’s release of the consumer price index.

Economists at Daiwa say services prices will help to offset the easing in gasoline prices and downtrend in food inflation.