Treasury Bond Yields and Interest Rate Cuts: An Economic Uncertainty Roundtable

Investors ponder economic outlook as U.S. Treasury yields decline

As the yield of a treasury bond decreases, the price increases. One basis point equals 0.01%. Investors closely monitor Federal Reserve officials’ comments and latest data to gauge the outlook for the economy. There is uncertainty about when and how often the Fed will cut interest rates this year, as officials have indicated that their decisions will depend on the state of the economy.

Recent data has shown that durable goods orders rose more than expected in February, while consumer confidence has declined in optimism about the economy. Some policymakers believe that there may be fewer than three rate cuts this year, as previously forecasted.

On Wednesday, Fed Governor Christopher Waller is expected to give remarks, and on Thursday important data such as weekly initial jobless claims, the final reading of US GDP for Q4, and consumer sentiment insights will be released. The most anticipated data of the week is set to be released on Friday – personal consumption expenditures price index – the Fed’s preferred inflation measure – along with personal income and spending figures. With markets closed for Good Friday, traders’ reactions to this data will have to wait until next week.

Leave a Reply