7/10/2019, 3:50 PM (Source: TeleTrader)
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Two-year treasuries spike on Powell's assessment

Prices of short-term United States government debt surged on Wednesday, which means yields plunged, after Federal Reserve Chairman Jerome Powell repeated rate-setters are determined to act in order to sustain economic growth. Stocks on Wall Street hit record highs and the yield curve steepened after in written remarks before a hearing in Congress, he expressed concern about a weakening in the pace of business investment, which market participants may interpret as a hint the central bank would lower borrowing costs.

At the same time, the top policymaker said companies "are increasingly willing to hire workers with fewer skills and train them" and that wage gains have been greater for lower-skilled workers. Of note, the Department of the Treasury is today selling $24 billion in the second reopening of a 10-year note auction. Traders are also waiting for the release of the minutes from the Fed's previous meeting.

The two-year Treasury note yield slumped 6.1 basis points to 1.856% at 9:45 am ET. The ten-year rate was just 0.6 points lower at 2.062% compared to a 2.2-point rise for the 30-year bonds. Corresponding futures gained 0.1% and 0.11% and slipped 0.06%, respectively.

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