investors are weighing the prospects of the Fed’s interest rate policy

US Treasuries rose Thursday as investors weighed the prospect of further rate hikes from the Federal Reserve and awaited new economic data.

At 4:23 a.m. ET, the yield on the 10-year Treasury benchmark was up just over three basis points to 4.028%, trading above the 4% mark at levels last seen in early November.

The 2-year Treasury yield last traded at 4.9017% after rising more than one basis point. Earlier in the session, it had risen to 4.937%, a level last seen in mid-2006 according to CNBC calculations based on Refinitiv data.

Revenue and prices have an inverse relationship and one basis point equals 0.01%.

Treasure Chests

US1M 1 month US Treasury 4.613% +0.02 0.00%
US3M US Treasury at 3 months 4.916% +0.049 0.00%
US6M US Treasury at 6 months 5.18% +0.024 0.00%
US1J US Treasury at 1 year 5.085% +0.026 0.00%
US2Y US Treasury at 2 years 4.889% unch unch
US10Y US Treasury at 10 years 4.024% +0.028 0.00%
US30Y US Treasury of 30 years 3.988% +0.035 0.00%

Investors factored in the likelihood of further interest rate hikes and that interest rates would stay high for longer.

On Wednesday, Raphael Bostic, president of the Atlanta Fed, released a statement saying he believed rates should go even higher and remain high “well into 2024” as the battle with inflation continues.

Meanwhile, Neel Kashkari, president of the Minneapolis Fed, indicated that further rate hikes are on the horizon and that the Fed could accelerate the pace of rate hikes again.

At its last meeting, the central bank raised interest rates by 25 basis points. This marked a slowdown from the previous five increases, which included four consecutive 75 basis point increases followed by a 50 basis point increase.

Many investors are concerned about the pace of interest rate hikes that are dragging the US economy into recession.

Also on Wednesday, the February ISM Manufacturing Index came in at 47.7%, showing that economic activity in the sector contracted over the month.

On Thursday, investors will be closely watching the release of weekly initial jobless claims and comments from Fed Governor Christopher Waller.

CNBC’s Ganesh Rao contributed to this report


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