Daily Market Color January 12, 2021Treasury Yields Fall for the First Time This Year Treasury yields turn lower for the first time in 2021 Yields fell mid-day after a government auction of $38 billion of the securities was met with higher-than-expected demand. The surprise helped Treasurys rally across the curve after nearly 5 consecutive sessions of weakness, the 10-year Treasury yield falling 2 basis points to close at 1.14%. Swap rates followed yields lower, falling 1-3 basis points across a flattening curve. Boston Fed President Eric Rosengren believes economy will not reach 2% inflation target over next two years The Boston Fed President made the remarks in an appearance before the greater Boston chamber of commerce, adding that he believes the Fed will continue their currently monthly asset purchases throughout the entire year. Rosengren’s comments contradicted Kansas City Fed President Esther George’s earlier public comments where she stated that inflation may surprise to the upside. Despite his lukewarm view on inflation, Rosengren still said he expects a strong economic rebound provided it’s given “substantial fiscal and monetary support.” Banks kick off earnings season JPMorgan Chase & Co., Citigroup Inc. and Wells Fargo & Co are among the banks reporting 4Q20 earnings this week. Analysts expect earnings will reflect the near-term obstacles faced by banks, which include challenged loan growth, weak NIMs, and high charge-offs.
