FX.co ★ US 10-Year Yield Rises on Hawkish Fed Signals

The US 10-year Treasury yield rose about 3 basis points to 4.98% on Tuesday, after hawkish remarks from Federal Reserve officials reinforced expectations of additional interest rate hikes. On Monday, Chicago Fed President Austan Goolsbee warned that the central bank cannot ignore ongoing supply-side shocks, while St. Louis Fed President Alberto Musalem indicated that further rate increases may be needed to bring inflation back toward the Fed’s target.

Market participants now look ahead to speeches from Fed officials John Williams and Tom Barkin later today. Last week, the Fed raised interest rates for the first time in three years and signaled the likelihood of further tightening later this year to contain inflation.

At the same time, oil prices declined for a fourth consecutive session, as intensified diplomatic efforts to resolve the Middle East conflict and steady energy exports from the region helped ease inflation concerns.