3-Year Korean Treasury Bond at 2.651%... Rises on 'Hawkish' Remarks by Fed Chair

"No Need to Hasten Policy Adjustments"

Government bond yields rose across the board on the 12th due to the 'hawkish' remarks by Jerome Powell, Chairman of the U.S. Federal Reserve (Fed).

In the Seoul bond market that day, the 3-year government bond yield closed at 2.651% per annum, up 1.8 basis points (1bp = 0.01 percentage points) from the previous trading day. The 10-year yield rose 3.0bp to 2.879% per annum.

The 5-year and 2-year yields increased by 2.9bp and 1.7bp, closing at 2.744% and 2.717% per annum, respectively. The 20-year yield rose 2.1bp to 2.772% per annum. The 30-year and 50-year yields increased by 1.6bp and 1.7bp, recording 2.698% and 2.607% per annum, respectively.

This rise in market yields is interpreted as a reaction to Chairman Powell reaffirming his previous stance that there is no need to rush rate cuts during his testimony to the U.S. Senate the day before (local time). Powell stated, "The current monetary policy stance of the Fed is significantly less restrictive than before, and the economy remains strong," adding, "We do not need to hasten adjustments to the policy stance."

Accordingly, the 10-year U.S. Treasury yield rose 3.80bp to 4.538% per annum in the New York market compared to the previous trading day. Selling pressure from foreign investors in the futures market also influenced government bond yields.