US Treasury yields were lower on Wednesday as risk sentiment returned to global markets.
Yields on benchmarks after 5:40 am ET 10 year treasury note was down at 3.21%, while the yield on 30 Year Treasury Bond fell to 3.299%. Yields move inversely to prices.
Concerns of a potential recession have buoyed investor sentiment in recent weeks, with analysts divided on its likelihood, timing and scale.
federal Reserve Last week, interest rates were increased by 75 basis points, its Biggest increase since 1994As it looks to contain inflation running at 40-year highs, aggressive tightening could mean putting further downward pressure on growth.
On Wednesday, markets will turn to Fed Chairman Jerome Powell’s testimony before Congress later in the morning. UBS Global Wealth Management said in a note that investors need to look for strong evidence that inflation is cooling off before a change in market sentiment is likely.
“Inflation control today is less about wages and more about profits and pricing power. But the questions for investors remain: Has consumer price inflation (or just gasoline prices) become an inflation target? With forward guidance Why should anyone believe anything about Powell? UBS chief economist Paul Donovan said.
“Markets are flip-flopping between fears of recession and fears of inflation. Today it is fears of recession. Real wage growth in most major economies is dire. However, consumers are cutting savings rates or opting to support demand. Borrowing for – limiting the growth slowdown.”