The US 10-year Treasury yield fell Friday morning but remained above the 1.4% mark after rising to 1.6% in the previous session.
On Thursday, the 10-year yield rose more than 16 basis points to 1.614%, its highest level since February 2020, and rose more than half a percentage point in late January.
The move irritated the investors and continued Pressure on the stock marketsThe Nasdaq suffered its worst one-day loss since October.
The rise in 10-year return, which serves as a benchmark for mortgage rates and auto loans, was driven by expectations of an improvement in economic conditions with coronavirus vaccine adoption and fears of higher inflation.
The USA The House of Representatives will approve the $ 1.9 trillion Covid aid spending package through Friday, supporting expectations for economic recovery.
Wells Fargo strategists said in a statement Thursday, however, that they believe “the odds have been increased that the Fed will have to try to downgrade the recent rate hike”.
Meanwhile, Bank of America’s credit strategist, Hans Mikkelsen, said that since the summer economists “economic growth is repeatedly underestimated to an unprecedented extent. “
“There seems to be a real risk that the Fed will no longer sound cautious and that this transition could lead to wider credit spreads,” he said.
Looking ahead, data measuring January personal income and spending growth in the US will be released on Friday at 8:30 a.m. ET.
January consumer personal spend data that tracks changes in the cost of goods and services purchased by consumers and originated from the Federal Reserve preferred inflationary measure, is also due at 8:30 p.m. ET.
The University of Michigan’s final February consumer sentiment readings are expected to be released at 10 a.m. ET.
There are no auctions on Friday.
– – CNBC’s Patti Domm and Bob Pisani contributed to this report.