NEW YORK- US Treasury yields moved higher on Wednesday as the Treasury Department saw weak demand in an auction and traders assessed when the Federal Reserve may pause its interest rate cutting cycle as US economic growth remains above expectations.
Investors correctly betting that Republican Donald Trump would win the US presidential election while Republicans also take control of Congress helped send yields higher over the past two months.
Market participants are now waiting on clarity over Trump’s policies and the next round of jobs and inflation data that is likely to influence Fed policy.
“It seems like we’re going to have to wait until the next nonfarm payroll release and the next CPI release to really see how that informs the Fed,” said Michael Lorizio, head of US rates trading at Manulife Investment Management.
A much-stronger-than-expected jobs report for September was followed by a much weaker one for October, though analysts noted that the last release was negatively affected by hurricanes. Two Federal Reserve governors on Wednesday laid out competing visions of where US monetary policy may be heading.
