U.S. Treasury yields rose Monday as investors assessed the outlook for the U.S. economy and earnings season pressed on.
The 10-year Treasury yield was up 7 basis points to 3.595%. The 2-year Treasury yield climbed more than 9 basis points to 4.198%. Yields and prices have an inverted relationship and one basis point equals 0.01%.
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WATCH HEREThe rise in yields came as earnings season heated up, with results from Charles Schwab and a handful of financial sector names. The sector's come under pressure in recent weeks as the collapse of Silicon Valley Bank fueled a liquidity crisis.
Elsewhere, the latest New York area manufacturing report for April showed a strong economy, fueling some concern that the Federal Reserve may have more work to do.
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"What you're seeing from the bond market — it's keying off of incrementally better economic data, which is also suggesting that the Fed could still move forward with a rate hike," said Keith Lerner, Truist's co-chief investment officer.
More than 88% of traders are calling for a 25 basis point rate hike at the central bank policy meeting next month, according to CME Group's FedWatch tool. It marks a stark contrast to about a month ago as Wall Street bet on a halt in tightening amid the turmoil rattling the banking sector.
The 2-year Treasury yield breached the key 4% level on Friday even though data published throughout the week indicated that inflationary pressures could be easing.
