NEW YORK (dpa-AFX) – US government bonds slipped slightly into the red on Tuesday after initial gains. The futures contract for ten-year Treasuries (T-Note Future) fell by 0.01 percent to 117.02 points. The yield on ten-year government bonds was 3.11 percent.
On the market, the initial gains were justified with a counter-movement to the sometimes significant price losses of the days before. This movement was primarily triggered by comments from the US Federal Reserve. Its boss Jerome Powell had recently emphasized the high priority of combating inflation and thus put a damper on hopes of interest rate cuts in the coming year.
Neel Kashkari, Minneapolis Regional Federal Reserve Chairman, said he was satisfied with the clear market reaction. This shows that investors understood the Federal Reserve’s determination, Kashkari said, referring to Powell’s comments. Recently, inflation in the USA had weakened somewhat. At 8.5 percent, however, it is still more than four times the Fed’s price target.
Robust US economic data were then published during trading on Tuesday, which caused yields to rise and thus prices to fall again. The data has been interpreted by the market in such a way that the Fed has a lot of leeway for significant interest rate hikes. According to the Ministry of Labour, there were more job vacancies than expected in July, meaning that the job market is still extremely tight. In addition, consumer sentiment in August brightened more than analysts had forecast