© Archyde.com/Kevin Lamarque
FILE PHOTO- Security bollards at the entrance to the Federal Reserve in Washington.
By Karen Brettell
NEW YORK, March 3 (Archyde.com) – The U.S. Treasury yield curve hit its flattest level since March 2020 on Thursday, after Federal Reserve Chairman Jerome Powell reiterated his support for a 25 basis point interest rate hike this month, and on the eve of the expected February jobs report.
* Powell reiterated his support for a rate hike at the Fed’s March 15-16 meeting on his second day of speaking to Congress. He added that Russia’s war in Ukraine could hit the US economy in a variety of ways, from higher prices to lower spending and investment, though it’s not clear what the ultimate impact will be.
* Returns have swung wildly this week, as investors try to balance economic risks from Russia’s invasion of Ukraine and ensuing sanctions on Moscow with expectations the Fed will have to raise rates to deal with persistently high inflation.
* Yields fell sharply on Monday and Tuesday as concerns about the conflict mounted, before rebounding sharply on Wednesday as the possibility of the Federal Reserve raising interest rates loomed again. Thursday’s moves were more subdued, although the two-year yield was higher.
* The two-year yield, highly sensitive to movements in interest rates, rose 2 basis points to 1.536%. On Tuesday they had fallen to 1.261%, the lowest level since February 4.
* Meanwhile, benchmark 10-year yields fell 2 basis points to 1.844%, after hitting 1.910% on Wednesday. On Tuesday it fell to 1.682%, the lowest level since January 5.
* The yield curve between the two-year and 10-year notes reached 30 basis points, the flattest level since March 2020.
* Employment data on Friday would show 400,000 jobs were added last month, according to the median estimate of economists polled by Archyde.com.
(Reporting by Karen Brettell Edited in Spanish by Manuel Farías)