NEW YORK (dpa-AFX) – US government bonds came under pressure on Wednesday. The futures contract for ten-year Treasuries (T-Note future) fell by 0.21 percent to 120.67 points. The yield on ten-year government bonds rose to 2.61 percent. During the day, it had reached its highest level since March 2019.
In the middle of the week, the focus was on monetary policy. The Fed is signaling a speedy reduction in its total assets, which had been massively expanded during the corona pandemic. According to the minutes of the most recent meeting of the FOMC monetary policy committee, the aim is to let bonds worth up to USD 95 billion expire each month without buying new ones. A decision is expected to be made at the upcoming meeting in early May.
The designated Fed Vice Chair Lael Brainard commented on the subject the day before. She pleads for a rapid start to reducing the balance sheet as early as May. In addition, it advocates a much faster deceleration than in the previous tightening period from 2017 to 2019. At that time the Fed was rather cautious, but inflation is currently much higher, which is putting pressure on the monetary authorities. The high expectations of the Fed have driven up capital market interest rates in recent months./la/zb