Following the notable rebound seen last Friday, treasuries showed a substantial move back to the downside during trading on Monday.
Bond prices came under pressure in morning trading and remained firmly negative throughout the day. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 9.1 basis points to 4.342 percent.
The ten-year yield more than offset the 5.7 basis point slump seen in the previous session, reaching its highest levels in over fifteen years.
The sharp pullback came amid lingering concerns about the outlook for interest rates, with recent economic data raising expectations the Federal Reserve will keep interest rates higher for longer than had been anticipated.
Trades continued to look ahead to the economic summit in Jackson Hole, Wyoming, where major central bankers are congregating later in the week to deliberate on monetary policy.
Federal Reserve Chair Jerome Powell is scheduled to speak on the economic outlook before the Jackson Hole Economic Symposium on Friday.
“Fed Chair Powell will be trying to avoid a policy mistake here. Two years ago, he said inflation was transitory,” said Edward Moya, senior market analyst at OANDA. “Last year, he said The annual Jackson Hole gathering will undoubtedly emphasize the need for policymakers to keep rates higher for longer.”
“Powell might stick to his hopes of a soft landing, while hinting that eventually rates will be able to come down,” he added. “Soft landing or not, some investors won’t be able to pass up getting paid over 5% on short-term US debt they can hold for a few months.”
The economic calendar remains relatively light on Tuesday, although traders are likely to keep an eye on a report on existing home sales.
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