US 10-Year Treasury Yield Surpasses 2.9% Amid Fed Tightening Concerns

[Asia Economy New York=Special Correspondent Joselgina] U.S. Treasury yields surged due to inflation and concerns over monetary tightening. On the 19th (local time), the 10-year Treasury yield surpassed 2.9% after the Federal Reserve (Fed), the central bank, mentioned the necessity of a 0.75 percentage point rate hike.

According to economic media CNBC and others, in the New York bond market that afternoon, the 10-year yield traded at 2.944%, up 0.08 percentage points from the previous session. It briefly soared to 2.948% during the session. This is the highest level since December 2018. The 30-year yield briefly exceeded 3% but slightly eased, though it remains higher than the previous session. The 2-year yield, which is sensitive to monetary policy, is moving around 2.59%.

Treasury yields and prices move inversely. This sharp rise in Treasury yields is interpreted as reflecting growing concerns over rising inflation and slowing economic growth, alongside expectations that the Fed's tightening measures may accelerate further.

James Bullard, President of the Federal Reserve Bank of St. Louis, left open the possibility that the Fed could raise rates by 0.75 percentage points at once. While he drew a line against raising rates higher than 0.50 percentage points at a time, just mentioning the possibility of a 0.75 percentage point hike is seen as having fueled upward pressure on yields.

Meanwhile, the World Bank (WB) and the International Monetary Fund (IMF) lowered their global economic growth forecasts for this year, considering the impact of Russia's invasion of Ukraine and other factors. On this day, the IMF significantly downgraded its global economic growth forecast for this year from the January revision of 4.4% to 3.6%. This is considerably lower than last year's estimated growth rate of 6.1%.