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Treasury Yields Climb as Investors Assess Growth and Inflation Fears

Source: NYSE

U.S. Treasury yields climbed on Wednesday as investors await a key inflation indicator and assess signs of slowing economic growth.

The yield on the benchmark 10-year Treasury note increased by roughly 6 basis points to 3.033%, while the yield on the 30-year Treasury bond also rose about 6 basis points to 3.182%. Yields move inversely to prices, and a basis point is equal to 0.01%.

The rise for U.S. Treasury yields mirrored similar moves in Europe, where the European Central Bank is following the Federal Reserve in tightening monetary policy.

"While the ECB is worried about the collateral damage to the markets due to the end of QE and rate hikes likely starting in July, they need to understand that the more they do right now, the more it might actually contain the rise in longer term yields," Peter Boockvar, chief investment officer of Bleakley Advisory Group, said in a note to clients.

Auctions were held on Wednesday for four-month and 10-year Treasurys. Yields moved higher following the 10-year auction.

On the economic front, mortgage applications fell to their lowest level in more than two decades as rising interest rates appear to be spooking potential buyers.

Meanwhile, a widely tracked Fed gauge is indicating that the U.S. economy could be on course for a second successive quarter of contraction. The Atlanta Fed's GDPNow tracker is pointing to an annualized gain in gross domestic product of just 0.9% for the quarter.

Markets are looking ahead to May's consumer price index reading on Friday, with the print likely to be influential in the scale and speed of the Fed's monetary tightening path.

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