U.S. Treasury yields were mixed on Thursday morning, as investors continued to digest the Federal Reserve’s latest policy update.
The yield on the benchmark 10-year Treasury note rose by less than basis point to 1.8495% at 3:45 a.m. ET. The yield on the 30-year Treasury bond fell by 2 basis points to 2.1413%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
The 10-year rate traded above 1.86% on Wednesday, after the Fed signaled that it could start raising interest rates in March, for the first time in more than three years.
Fed Chairman Jerome Powell said in a post-meeting news conference that he believed that there’s “quite a bit of room” to raise rates without hurting the labor market.
In a post-meeting statement, the Federal Open Market Committee said that with “inflation well above 2 percent and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.”
In addition, the FOMC said that the central bank’s monthly bond-buying will proceed at just $30 billion in February, indicating that program is expected to end in March as well at the same time that rates increase.
Bill Smead, chief investment officer at Smead Capital Management, told CNBC’s “Squawk Box Europe” that the “market has been in denial about what we call the ‘inflation wolverine.'”
“They trotted this out in the pandemic, the raising [of] inflation as a way to heal the economy, like a friendly puppy dog and inflation is not a friendly puppy dog,” Smead said.
On Thursday, a reading of U.S. economic growth in the fourth quarter is due to be released at 8:30 a.m. ET.
The number of jobless claims filed during the week ended Jan. 22 is also set to be out at 8:30 a.m. ET.
Meanwhile, the number of pending home sales in December is slated for release at 10 a.m. ET.
Auctions are scheduled to be held on Thursday for $50 billion of 4-week bills, $40 billion of 8-week bills and $53 billion of 7-year notes.
— CNBC’s Jeff Cox contributed to this market report.
