• Sat. Apr 20th, 2024

Manufacturing Growth Causes Unexpected Rise in Treasury Yields, Dampening June Rate Cut Hopes

BySamantha Jones

Apr 2, 2024
Investors analyze U.S. Treasury yields amidst economic data scrutiny

On Tuesday, the 10-year Treasury note yield increased, following its gains from the previous session. As traders reconsidered the possibility of the Federal Reserve cutting rates in June, the benchmark rate rose more than 3 basis points to 4.361%, reaching its highest level since November 28 and briefly breaking above 4.4%. Meanwhile, the 2-year Treasury note yield decreased nearly 3 basis points to 4.691%.

Yields and prices move in opposite directions, with one basis point equaling 0.01%. This latest movement in Treasury yields followed news that manufacturing in the U.S. expanded for the first time in 17 months. The Institute for Supply Management reported that the ISM manufacturing index rose to 50.3, up from 47.8 in February and surpassing the Dow Jones consensus estimate of 48.1. A reading above 50 indicates growth as it measures the percentage of companies reporting expansion against contraction.

Investors are now more cautious about the direction of rate cuts in the future following this unexpected return of manufacturing growth in the U.S., which has caused market odds for a June rate cut to decrease to around 58.8% from about 70% a week ago. Dutch bank ING noted that markets interpreted this growth as reducing the likelihood of significant Fed rate cuts due to its impact on economic data outcomes.

Last month, the U.S central bank left interest rates unchanged for the fifth consecutive time as anticipated by many investors, maintaining its benchmark overnight borrowing rate within a range of

By Samantha Jones

As a dedicated content writer at newszxcv.com, I bring a passion for storytelling and a keen eye for detail to every piece I create. With a background in journalism and a love for crafting engaging narratives, I strive to deliver informative and captivating content that resonates with our readers. Whether I'm covering breaking news or delving into in-depth features, my goal is to inform, entertain, and inspire through the power of words. Join me on this journey as we explore the ever-evolving world of news together.

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