Government bond yields fall as fears of an economic slowdown mount

US Treasury yields fell Tuesday morning as investors remained focused on the outbreak of Covid-19 in China and concerns over a global economic slowdown.

The benchmark 10-year Treasury bond yield fell below one basis point to 2.8335% as of 3:45 am ET. The yield on the 30-year government bond fell less than a basis point to 2.9048%. Yields move inversely with prices and 1 basis point equals 0.01%.

Treasury yields fell Monday along with a sell-off in equity markets. This came amid concerns that a Covid-19 outbreak in Beijing, China, could lead to a lockdown and slow economic growth in the region.

Beijing announced late Monday that it would expand mass testing for the virus.

Investors also remain concerned about the potential drag on economic growth from higher inflation and rising interest rates.

David Pierce, chief executive of GPS Capital Markets, told CNBC’s Squawk Box Europe on Tuesday that he believes the Federal Reserve will hike interest rates by 50 basis points at the next two policy meetings.

However, Pierce said those increases could “really turn the tide in the economy and slow things down so much that they might have to roll back very quickly — it’s a really volatile situation right now.”

Stock picks and investment trends from CNBC Pro:

As for Tuesday’s upcoming economic data releases, March durable goods orders will be released at 8:30 am ET.

The S&P/Case-Shiller February home price index is expected to be released at 9:00 am ET.

New home sales data for March and CB’s April consumer confidence index are scheduled to be released at 10:00 am ET.

The developments in the Russia-Ukraine war are also still in the focus of investors. At a high-level meeting in Kyiv on Sunday, the US pledged just over $700 million in military funding to help Ukraine and other allied countries in central and eastern Europe involved in the war effort.

The U.S. State Department approved a potential $165 million sale of ammunition to Ukraine.

Meanwhile, an auction for $48 billion in 2-year notes is scheduled to take place on Tuesday. employees contributed to this market report. Government bond yields fall as fears of an economic slowdown mount

Chrissy Callahan

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