On Thursday, as investors continued to weigh the possibility of a recession, the yield on the standard 10-year Treasury note in the United States dropped dramatically.
A 7 basis point decrease brought the yield on the 10-year Treasury note to 3.089 per cent. The yield dropped to its lowest point approximately two weeks earlier in the day, 3.005 per cent, earlier in the day.
To trade at 3.198 per cent, the yield on the 30-year Treasury bond decreased by almost 4 basis points. Prices and yields move counter-clockwise.
The biggest economy in the world may enter a recession as a result of aggressive monetary tightening, and market investors are growing increasingly anxious.
Jerome Powell, the chairman of the Federal Reserve, concluded two days of evidence before Congress on Thursday by affirming that the American central bank is “deeply committed” to lowering the skyrocketing inflation rate.
In his Wednesday testimony before the Senate Banking Committee, Powell stated, “At the Fed, we understand the suffering high inflation is inflicting.” We are working quickly to reduce inflation because we are firmly committed to doing so.
The Fed raised its benchmark funds rate by 75 basis points last week, the most since 1994; however, rapid tightening may result in further pressure on GDP.
The likelihood of a recession increased this week at several Wall Street institutions. Due to poor housing, industrial production, and capital goods reports, UBS raised the probability of a recession to 69%.
We are now keeping an eye out for any additional negative follow-through or to see if we merely reached a local high and growth momentum in the hard data picks back up, according to a note from UBS on Thursday.
The yield on the benchmark 10-year Treasury note in the US fell sharply on Thursday as investors continued to consider the potential of a recession.
At several Wall Street organisations this week, the probability of a recession rose. UBS increased the likelihood of a recession to 69 per cent as a result of subpar housing, industrial production, and capital goods reports.
According to a letter from UBS on Thursday, we are now keeping a watch out for any additional negative follow-through or to see if we simply set a local high and growth momentum in the hard data picks back up.
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Citigroup said that a decline in consumer spending might make it harder for the Federal Reserve to implement a soft landing, increasing the likelihood of a recession to 50%.
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The likelihood of a downturn is “greater and more front-loaded” than it was previously, according to Goldman Sachs, increasing the likelihood of a U.S. recession during the coming year from 15% to 30%.
The Labor Department said on Thursday that although the labour market is very tight, U.S. weekly unemployment claims decreased by 2,000 to a seasonally adjusted 229,000 for the week ending June 18.
