Photo: Jerome Powell, chairman of the U.S. Federal Reserve. Jerome Powell, chairman of the U.S. Federal Reserve.

Bond investors’ concern over a potential U.S. recession deepened after Federal Reserve Chair Jerome Powell signaled that policymakers may keep pushing interest rates higher.

Yields on 2-year Treasuries exceeded those on 10-year notes by as much as 1 percentage point on Wednesday, after short-term rates climbed following Powell’s testimony in Congress. The 2-10 segment of the yield curve—which has inverted before each of the past five U.S. recessions—is now the most inverted since March.

The impact of Powell’s testimony may have been exacerbated by higher-than-expected UK inflation data, which added to speculation the Bank of England will increase the pace of its tightening when it meets Thursday. A number of developed central banks turned more hawkish this month on concern inflation is staying too high for too long.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?


NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.