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The 10-year US Treasury yield held above 1.72% on Wednesday morning after the release of private payroll data and ahead of President Joe Biden’s rollout of an infrastructure plan.
The benchmark 10-year T-bill yield edged down to 1.721% at 8:15 a.m. ET. The yield on the 30-year Treasury bill fell to 2.381%. Yields move inversely with prices.
The 10-year yield hit a 14-month high on Tuesday, breaking above 1.77%.
Bryn Jones, head of fixed income at Rathbones, told CNBC’s “Squawk Box Europe” Wednesday that the bond market “is really pressuring central banks to question inflation that might cross.”
Federal Reserve Chairman Jerome Powell recently said he expected inflation to rise this year, but also suggested the central bank would let the economy warm up if it helped to reach full employment.
Jones wondered if the yield curve could steepen further “without central banks doing anything.” The yield curve plots the different interest rates on short and long-term treasury bills, and a steeper curve usually indicates stronger economic growth and rising inflation.
However, Jones added that he didn’t see the 10-year yield rising much more than 2% in the short term.
ADP’s private payroll data for March showed a gain of 517,000 jobs. This was above the 525,000 private jobs expected by economists polled by Dow Jones, but well above the 171,000 jobs added in February.
Biden is expected to reveal more details about his infrastructure package on Wednesday, which could cost more than $ 2 trillion.
The pending home sales data for February is due out at 10 a.m. ET.
An auction will take place on Wednesday for $ 35 billion in 119-day tickets.
– CNBC’s Maggie Fitzgerald contributed to this report.
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