Tuesday's auction of 10-year US bonds worth $39 billion. dollars, showed unexpectedly strong demand despite risks surrounding Wednesday's inflation report and Fed meeting, Bloomberg reports.
The bonds in question were auctioned with a yield of 4.448 percent, although it was previously valued at 4.458 percent. Lower yields mean high demand. This is also shown by the fact that almost three quarters of the offer was used by investors – this is the highest percentage since February 2023.
"We see that there is demand," said Vanguard Group portfolio manager John Madziyire.
Bloomberg recalls that the 10-year bond yield rose from below 4.3 percent last week after macroeconomic data showed the strength of the US economy, which will allow the Fed to keep interest rates high for longer.
Today, the US Federal Reserve will release its latest monetary policy forecasts, namely those related to interest rates. Three rate cuts this year were expected in March. The swaps market is currently pricing in a 36 basis point cut by December and an 80 percent chance of another rate cut in November.
By midday, the yield on America's 10-year Treasury note had fallen to 4.396 percent on the exchange, after yesterday's close of 4.406 percent. At the end of last year, it was 3.866 percent.
