The 10-year U.S. Treasury yield advanced on Thursday as investors weighed the state of the U.S. economy after Federal Reserve Chair Jerome Powell raised concerns about the inflationary and economic growth risks of the White House’s tariffs.
The benchmark 10-year Treasury yield rose around 5 basis points to 4.333%. The 2-year Treasury yield ticked about 1 basis point higher to 3.8%.
One basis point is equal to 0.01%. Yields and prices move in opposite directions.
Investors are considering remarks made by Powell on Wednesday, when the central bank leader said the Fed could find itself in the sticky dilemma of trying to control inflation and support economic growth.
U.S. President Donald Trump’s tariffs have created uncertainty around the growth of the U.S. economy, with Powell saying he expects a “rise in inflation” and decreased growth this year.
“We may find ourselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said. “If that were to occur, we would consider how far the economy is from each goal, and the potentially different time horizons over which those respective gaps would be anticipated to close.”
Deutsche Bank analysts said in a note that, despite the bleak picture, Powell does not appear to be in a rush to react to economic challenges.
“His comments added to the sense that the Fed wouldn’t be in a rush to react to the weaker surveys of recent weeks,” the analysts said. “Moreover, he downplayed the need for any Fed market intervention, noting that markets remained orderly even if they were ‘struggling with a lot of uncertainty.'”
Jobless claims data released Thursday came in below the consensus forecast of economists polled by Dow Jones.
