10y Treasury Yield Reaches 2024 High

Rates continue last week’s climb. Swap rates and UST yields rose again after last week’s 15-20bp climb. Short-term rates rose ~4bps while the long end rose ~2bps. The 10y UST yield is at its highest level since November, now at 4.42% after reaching intraday heights of 4.46%. All attention is now  on Wednesday’s CPI report, which is expected to show slowing core price inflation. Elsewhere, Crude oil declined below $90 per barrel intraday due to renewed hopes of a cease-fire in Gaza, though a late-session rally saw Crude close at $90.50.

Consumers’ inflation expectations remain steady, but personal debt is of concern. The NY Fed’s survey of consumer expectations for March showed that consumer inflation expectations have stabilized for the year ahead, remaining steady at 3%. Looking ahead 3-years, expectations ticked up from 2.7% to 2.9% but declined from 2.9% to 2.6% at the 5-year horizon. However, personal debt concerns were magnified for respondents. The expected chance of missing a minimum debt payment during the next 3 months rose 1.5% to 12.9%, the highest reading in the past 4 years.

Israel holds policy rate at 4.5%. The bank of Israel held rates steady for the second consecutive meeting after a 25bp rate cut in January. The central bank cited inflationary risks as a main driver of the decision despite 2.5% CPI in February, which is within the policy range. Increased spending in the war, geopolitical uncertainty, and a weak Shekel could elicit price increases. Bank of Israel Governor Amir Yaron said, “As long as we see the geopolitical environment moderate and stabilize… we can return to our (easing) path.”