U.S. Treasury yields rebounded on Tuesday as investors closely watched a reversal of the previous day’s global market selloff.
At 5:12 a.m. ET, the benchmark 10-year Treasury yield rose more than 5 basis points to 3.8371%. This comes after the 10-year Treasury yield fell to its lowest level since June 2023 on Monday.
The 2-year Treasury yield rose more than 7 points to 3.9627%. Yields and prices move in opposite directions, with 1 basis point equivalent to 0.01%.
Global markets appear poised to shake off Monday’s sharp decline.
U.S. stocks opened the month sharply lower as new data raised concerns about a worsening economic outlook. The weaker-than-expected data led to concerns among investors that the Federal Reserve may lag behind expectations in cutting interest rates to stave off a recession.
Federal Reserve policymakers kept interest rates steady on Wednesday, although Fed Chairman Jerome Powell gave investors some hope by saying a rate cut in September was on the table.
Carsten Brzeski, global head of macro at ING Research, said in an interview with CNBC: “I am more inclined to think that this is a big thunderstorm in the summer, but this is not a fundamental change in the real economy. start.
“I think what we’re seeing now is more of a reality check for the market, especially on the artificial intelligence side, and I hope and think we’re going to have a calmer situation now.”
Brzeski said he expects the Federal Reserve to cut interest rates by 50 basis points next month to boost market confidence.
“I don’t believe in these emergency meetings. It’s not serious enough at this point, but I think it would be a good signal for Jerome Powell to start a 50 basis point rate cut cycle because it’s really symbolic, “He added.
U.S. trade deficit data for June will be released around 8:30 a.m. ET on Tuesday.
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