U.S. 10-year yield hits 3 pct ahead of $32 bln 2-year auction

[jpak]

Source: Reuters

NEW YORK, April 24 (Reuters) - U.S. Treasury prices fell on
Tuesday, with the 10-year yield hitting 3 percent for the first
time in over four years ahead of a $32 billion auction of a new
two-year notes, which is part of this week's $96 billion in
fixed-rate government debt supply.

Inflation concerns due to rising commodity prices, along
with worries about growing Treasury supply, have stoked selling
in Treasuries since late last week, analysts said.

The move propelled the 10-year yield above 3 percent to its
highest since January 2014 and steepened the yield curve from
its flattest level in more than a decade last week, Reuters data
showed.

"The market is quite concerned about commodity prices across
the board with the exception of agricultural prices. They feed
into inflation," said Rob Waldner, chief strategist at Invesco
Fixed Income in Atlanta.

<more>

Read more: https://www.reuters.com/article/usa-bonds/corrected-treasuries-u-s-10-year-yield-hits-3-pct-ahead-of-32-bln-2-year-auction-idUSL1N1S10YO

[sandensea]

1. Jay Powell has suggested the Fed will stop buying Treasuries this October

This had better be a bluff, or we're headed for another great recession (the Fed finances most of our budget deficit - which will now exceed $1 trillion thanks to King Con).

[bronxiteforever]

2. Yikes! Hope that is a bluff too.

[bucolic_frolic]

3. It's actually reassuring the Fed will tighten to fight inflation

so as not to repeat the early 70s response to OPEC oil embargo when the Fed stayed loose, Nixon imposed wage-price controls and tariffs and removed us from the gold standard altogether.

The Fed is the last bulwark against large scale devaluation of the US dollar, by which I mean RAPID devaluation instead of the 2% yearly bleed that is now normal.

A fast economy like Trump is trying to run will produce inflation. Hunker down.

[CountAllVotes]

4. I was just at the grocery store

The bread I buy at the local co-op has gone from $4.17 a loaf to $4.89 a loaf. I used my member discount of 5% for the month and put the tab on my Discover Card which is giving 5% cash back on groceries until the end of June.



I cannot afford Dump's inflation, no I cannot!

[bucolic_frolic]

5. Yes, and all retailers learn the lesson to jack up prices to grow profits faster

and they are not shy ... why $4.89 instead of $4.39 or $4.49?

The only thing that slows them down is when people stop buying. How do you stop buying food?

[IronLionZion]

8. There are cheaper and more expensive breads for sale

so it is a measure of the economy to collect data on how much of each price point of bread is being sold and how that varies over time. If more people buy the expensive bread, then things are peachy. If more are buying the cheapest bread, then maybe not.

[CountAllVotes]

9. difficult

It was a 1-1/2 lb. loaf. It was not some sort of fancy expensive bread. Just bread.

I can see where this is all going.

Just got an increase from my ISP yesterday ...

No increase in monthly income is expected that is for sure!

[sandensea]

7. Yes. But to paraphrase Frank Sinatra: Nice 'n easy does it, every time.

The Fed was able to scale back Treasuries purchases for a while thanks to Obama's cutting the deficit in half.

Thanks to Cheeto however, our dear old federal government is now looking at financing needs of at least $1 trillion next year.

Since foreign banks and governments no longer finance our deficits (beyond token amounts), and we really have no other way of making those payments, we depend on the Fed.

The Fed prints money, buys the bonds, finances the deficit, keeps the bills the paid - and most important of all: their doing so prevents an all-out panic and run on the dollar.

By doing so they basically prevent an Argentina situation (which, of course, they and most other countries can't because they can't print dollars).

In short, a little tightening by way of scaling back large-scale Treasuries purchases might be good for the system for the reasons you stated above.

But an all-out abdication of their essential function as banker of last resort to the state could very well lead to an outright collapse. If that, God forbid, happens, try to leave if you can; with all the assault weapons around, it'll be Mad Max.

[beachbum bob]

6. China backing away from buying US debt?