Wednesday, March 22

Two-year US bond yield exceeds 1% for the first time since February 2020

The Fed will meet next week after a series of comments from its officials that the markets consider quite aggressive and that show the central bank’s willingness to act in the face of persistent inflation. “There seems to be a possibility that the Fed wants to move more aggressively in the early part of the tightening cycle,” Eugene Leow of DBS Bank in Singapore said in a note.

“This could come in the form of ending QE altogether in January, instead of waiting until March. Back-to-back hikes could also come into play (something not seen since the 2004-2006 hike cycle)” , he added. At the bottom of the curve, the five-year debt yield rose nearly 8 basis points on Tuesday to 1.6409%, the highest since January 2020.

At the longer end, the return on 20-year notes advanced more than 5 basis points to 2.249%, a high of more than seven months, and that on 30-year notes similarly improved, to a maximum of seven months of 2.1830%.