BONDS 2-year Treasury yield tops 5% for the first time since 2007

 BONDS

2-year Treasury yield tops 5% for the first time since 2007

The yield on the 2-year U.S. Treasury note topped 5% on Tuesday, and rose to its highest level since 2007 as investors assessed comments from Federal Reserve Chairman Jerome Powell, who said the central bank may need to increase the pace of interest rate hikes again.

The 2-year Treasury yield was last trading more than 12 basis points higher at 5.015%.

Meanwhile, the yield on the benchmark 10-year Treasury dipped one basis point 3.97% after briefly topping the key 4% level earlier in the session.

Yields and prices have an inverted relationship. One basis point equals 0.01%.

TREASURYS

TICKER	COMPANY	YIELD	CHANGE	%CHANGE
US1M	U.S. 1 Month Treasury	4.736	0.02	0
US3M	U.S. 3 Month Treasury	5.013	0	0
US6M	U.S. 6 Month Treasury	5.301	0.014	0
US1Y	U.S. 1 Year Treasury	5.249	0.035	0
US2Y	U.S. 2 Year Treasury	5.053	0.042	0
US10Y	U.S. 10 Year Treasury	3.991	0.016	0
US30Y	U.S. 30 Year Treasury	3.899	0.011	0

“The latest economic data have come in stronger than expected, which suggests that the ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in remarks prepared for two appearances this week on Capitol Hill.

“If the totality of the data were to indicate that faster tightening is warranted, we would be prepared to increase the pace of rate hikes,” Powell added.

The Fed chair’s comments suggested to investors that the terminal level of the federal funds rate could be higher than previously indicated, and that investors could expect a rate hike that is possibly larger than the most recent 25 basis point increase at the central bank’s next policy meeting.