The 10-year yield on the US Treasury fell on Friday morning, but remained above the 1.4% level, after rising to 1.6% in the previous session.
The yield on the 10-year Treasury benchmark decreased to 1.489% at 3:30 am ET. The yield on the 30-year treasury bond decreased to 2.276%. Yields move in the opposite direction to prices.
On Thursday, the 10-year yield jumped by more than 16 basis points to 1.614%, the highest level since February 2020 and by more than half a percentage point at the end of January.
The move bothered investors and put pressure on stock markets, with the Nasdaq suffering its worst one-day loss since October.
The 10-year yield increase, which is used as a benchmark for mortgage rates and car loans, has been driven by expectations of improved economic conditions as coronavirus vaccines are launched, as well as fears about higher inflation.
The US House of Representatives is expected to approve the $ 1.9 trillion aid package to Covid by Friday, supporting expectations of economic recovery.
However, Wells Fargo strategists said in a statement on Thursday that they believed that “the chances have been increased, the Fed will have to try to reduce the recent rate hike.”
Meanwhile, Hans Mikkelsen, a credit strategist at Bank of America, said that since the summer, economists have “constantly underestimated economic growth to an extent never seen before.”
“There seems to be a real risk that the Fed may not be able to ring any longer and this transition could see larger credit spreads,” he said.
Looking to the future, data measuring the rise in US personal income and spending in January is set to be released on Friday at 8:30 AM ET.
January data on personal spending by consumers, which tracks changes in the cost of goods and services purchased by consumers and is the preferred measure of Federal Reserve inflation, is also shipped at 8:30 AM ET.
The University of Michigan’s latest readings on US consumer sentiment for February are expected at 10 a.m. ET.
There are no auctions to be held on Friday.
– CNBC’s Patti Domm and Bob Pisani contributed to this report.