Treasury yields climb ahead of remarks by Fed Chair Powell

U.S. Treasury yields climbed on Thursday, with Federal Reserve Chairman Jerome Powell due to make speeches later in the day.

The yield on the benchmark 10-year Treasury note rose 4 basis points to 2.8728% at 4 a.m. ET. The yield on the 30-year Treasury bond moved 4 basis points higher to 2.9227%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Powell is due to give the welcoming remarks at the Volcker Alliance and Penn Institute for Urban Research Special Briefing, at 11 a.m. ET.

He is then due to speak on the global economy at an International Monetary Fund debate, at 1 p.m. ET.

This comes after the IMF cut its global economic growth forecast on Tuesday, for both 2022 and 2023, largely due to the effects of Russia’s invasion of Ukraine.

Investors will be listening closely to Powell’s remarks for any more clues around the Fed’s plans to aggressively tighten monetary policy, in order to rein in inflation.

Concerns around inflation and the potential effect of tighter Fed policy has seen yields spike, with the 10-year hitting its highest point since late 2018 on Tuesday, at 2.94%.

Grace Peters, head of investment strategy EMEA at JPMorgan Private Bank, told CNBC’s “Squawk Box Europe” on Thursday that her team expected inflation to peak during the second quarter of this year, and then fall more materially toward the end of the year and going into 2023.

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However, she said that given this peak in inflation would not have fed through into the economic data by the time of the Fed’s May and June policy meetings, it made sense that the central bank could go ahead with 50 basis point rate hikes, as had been priced into the market.

Peters said that “from a risk perspective, the concept of inflation peaking and therefore yields starting to peak out in due course as well, will offer some comfort for investors.”

Meanwhile, the number of initial jobless claims filed last week is due to be released at 8:30 a.m. ET.

The Russia-Ukraine war remains in focus for investors, with the second phase of the conflict, focusing on the Donbas region in eastern Ukraine, fully underway.

Auctions are due to be held on Wednesday for $35 billion of four-week bills, $30 billion of eight-week bills and $20 billion of five-year Treasury inflation-protected securities.

CNBC’s Holly Ellyatt contributed to this market report.

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