The US Treasury yield of ten years withdrew on Friday morning, but remained above the 1.4% point, after rising to 1.6% in the previous session.
The yield on the 10-year treasury note dropped to 1.489% at 3:30 a.m. ET. The return on the 30-year treasury bond fell to 2,276%. Yields move inversely to prices.
On Thursday, the 10-year yield jumped more than 16 basis points to 1.614%, the highest level since February 2020 and more than half a percentage point at the end of January.
The move unnerved investors and put pressure on the stock markets, with the Nasdaq’s biggest one-day loss since October.
The rise in 10-year yields, used as a benchmark for mortgage rates and car loans, is driven by expectations of improving economic conditions as coronavirus vaccines are introduced, as well as fears of higher inflation.
The US House of Representatives will approve the $ 1.9 billion Covid spending package by Friday, which will boost expectations of economic recovery.
However, Wells Fargo strategists said in a note on Thursday that they believe “the chances have increased that the Fed will have to try to reduce the recent move with higher rates.”
Meanwhile, Hans Mikkelsen, credit strategist at Bank of America, said that economists since the summer “have consistently underestimated economic growth to an extent never seen before.”
“There seems to be a real risk that the Fed will not be able to sound much longer and that the transition could lead to greater credit spreads,” he said.
Looking ahead, the data measuring U.S. personal income and spending growth in January will be released Friday at 8:30 p.m. ET.
The January data for personal consumer spending, which tracks changes in the cost of goods and services consumers buy and is the Federal Reserve’s preferred inflation measure, should also be at 8:30 a.m.
The final lecture from the University of Michigan on US consumer sentiment for February is expected to be at 10:00 ET.
There are no auctions that will be held on Friday.
– CNBC’s Patti Domm and Bob Pisani contributed to this report.