(Bloomberg) — The US bond market’s recovery was cut short by a Federal Reserve official’s mere mention of the possibility of an interest-rate increase.
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In response to a question during a conference in Washington, New York Fed President John Williams on Thursday said another rate hike isn’t his base case. But he also said that “if the data are telling us that we would need higher interest rates to achieve our goals, then we would obviously want to do that.”
Treasury yields, which were already headed higher after the latest US economic data, subsequently rose further. The move was led by the two-year yield, which climbed as much as 5 basis points to nearly 4.99%, near the high end of its recent range.
“We’ve done this round trip in terms of Treasury yields, and we’re right back to where we started a few months ago,” Aoifinn Devitt, Moneta chief…
