U.S. Treasury yields edged lower on Monday as investors watched developments in the Middle East and comments from the Federal Reserve's annual economic symposium in Jackson Hole, Wyoming. According to Sina Finance, the benchmark 10-year Treasury yield fell 1 basis point to 4.712% at 2:37 a.m. U.S. Eastern Time, while the 30-year yield was unchanged at 5.21% and the 2-year yield slipped 2 basis points to 4.327%.
Last Friday, after Fed Chair Kevin Warsh spoke in Jackson Hole, the 2-year Treasury yield, which is most sensitive to policy expectations, jumped more than 12 basis points and closed at about 4.354%. Market pricing now shows a higher probability of a rate hike at the Federal Open Market Committee meeting in September, with CME FedWatch indicating a 59.9% chance, up from 35.4% the day before Warsh's speech.
Barclays strategists said in a Monday morning note that the bank's economists now expect the Fed to raise rates twice this year, by 25 basis points each time, at the September and December meetings. UBS Global Wealth Management Chief Investment Officer Mark Haefele said his team's base case remains that core inflation will continue to ease steadily and the Fed will keep rates unchanged this year.
Investors will also watch a series of economic releases this week, including the ISM manufacturing PMI and JOLTS data on Tuesday, followed by the nonfarm payrolls report on Friday. Middle East conflict also remained in focus after U.S. forces struck Iranian targets overnight for the first time in weeks, and Iran said it had carried out retaliatory strikes on a U.S. base in Jordan.
After the escalation, Brent crude rose nearly 3% in early Monday trading and was up about 2% at $89.84 a barrel. West Texas Intermediate also moved higher, rising 1.68% to $84.80 a barrel at 3:37 a.m. U.S. Eastern Time.
Weatherly