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Yields Jump After Strong Economic Data

Bond yields surged after economic activity came in at its highest levels in nearly a year.

The two-year Treasury yield rose to 4.186%, up from 4.170% on Thursday and well above early morning lows below 4.1%.

Tweet on Bond Yields

Chart on economical data by Tullet Preton

The yield on the 10-year note last traded at 3.572%, up from 3.546% the prior day.

S&P Global data showed business activity jumped to an 11-month high at manufacturing firms based in the U.S., and 12-month high for companies in the service industry.

Prices also rose, sparking worries that the Federal Reserve still has work to do in taming inflation.

“Stronger demand conditions support sharper growth in April, but also bring renewed inflation momentum,” wrote S&P Global Market Intelligence’s senior economist Siân Jones.

The move comes a day after weak manufacturing data from the Philly Fed’s district spooked investors that a deep recession could be on the horizon. After the Thursday morning data, yields fell as bond prices rose.

The jumpiness of investors at incremental data points—which can be noisy and sometimes contradict each other day-by-day—highlights the lingering uncertainty and anxiety as markets gear up for what could be the final Fed hike of the cycle.



Image: CB