Daily Market Color

Treasury Yields Continue to Move Lower Across the Curve

Treasury yields continue to fall across the curve
Earlier today, Fed Chair Jerome Powell dispelled concerns of runaway inflation, which had played a part in fueling the recent frantic selloff.  Following his comments and a surprise uptick in jobless claims, Treasury yields and swap rates fell 1-6 bps across the curve – the 10-year closed over 5 bps lower at 1.62%.  Equity indices closed higher – the S&P 500 and DJIA rose 0.4% and 0.1%, respectively.
744,000 jobless claims were files last week
The number unexpectedly increased from 728,000 the week prior – the four-week moving average is now 723,750.  Though the US added 916,000 jobs in March, jobless claims remain well above the weekly pre-pandemic average of ~220,000.
Powell calms runaway inflation concerns
During the IMF meeting earlier today, Powell confirmed the Fed has the tools combat higher inflation, commenting that if expectations are “moving persistently and materially above levels we’re comfortable with, then we’d react to that.”  While Powell believes the US is on the road to economic recovery, he added” Until the world, really, is vaccinated, we’re all going to be at risk of new mutations and we won’t be able to really resume activity with confidence all around the world.”

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