US Treasury yields rise as recession risk declines

NEW YORK, July 25 (Reuters) – U.S. Treasury bond yields rose on Tuesday as the economy’s continued resilience despite a series of Federal Reserve rate hikes lowered the chance of a recession and raised the likelihood of two more hikes this year.

“People expect a recession and we still expect a recession. But I think the market estimate of the likelihood of a recession has dropped from 65%-70% to below 50%, said Evercore’s Stan Shipley. “People now expect the Fed to go for one or two more rate hikes and hold on for a longer period, maybe over a year, and that will pull the yield curve up.”[obligacji]up”.

The inversion of the closely watched portion of the U.S. 2- and 10-year Treasury yield curve – seen as a predictor of recession – fell to minus 99.50 basis points from minus 104.70 on Monday.

The US consumer confidence index in July exceeded the forecast and increased to 117 points, while analysts expected a value of 111.8.

The yield on 10-year US treasury bonds increased by 4.7 bp. to 3.904%.

The yield on 30-year public debt increased by 1.8 bp. to 3.938%.

Yields of 2-year Treasuries, which usually reflect interest rate expectations, rose by 6.2 bp. and amounted to 4.901%.

The US Treasury Department will conduct an auction on Tuesday for five-year bonds worth USD 43 billion, and on Thursday – seven-year bonds worth USD 35 billion.

The original message in English is available under the code: (Gertrude Chavez-Dreyfus)