Daily Market Color

2-Year Treasury Yield Hits New Multiyear High

Rebound in Rates Continues in Earnest. Rates continued to rebound higher for the second straight day, shrugging off a pullback in equities and a strong bond auction. The European Central Bank was the main catalyst, as rates reacted to the central bank’s surprise decision to taper its bond purchases at an accelerated rate. ECB President Christine Lagarde elaborated in her press conference, saying that the Russian invasion of Ukraine could create “persistent supply side implications” and create substantial risks to the upside in inflation. 2-year Treasury yields crested 1.70% for the first time since mid-2019 while the 10-year flirted with 2% once again during the session.

Y/Y CPI hits a 40-year high, rising 7.9% in February. Last month’s jump marked the fastest increase since 1982, beating the previous 40-year record of 7.5% set in January. M/M, CPI rose 0.8%, driven higher by rising energy prices. President Biden commented, “Today’s inflation report is a reminder that Americans‘ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike.”

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