investors digest Powell’s comments, await data

U.S. Treasury yields rose on Friday as investors digested Federal Reserve Chair Jerome Powell’s latest comments, and awaited further economic data.

At 4:15 a.m. ET, the 10-year Treasury yield rose by more than two basis points to 4.4453%. The yield on the 2-year Treasury rose by more than three basis points to 4.3307%.

One basis point equals 0.01% and yields and prices move in opposite directions.

Investors monitored Powell’s speech on Thursday for hints about future monetary policy decisions. Powell said that strong U.S. economic growth means the central bank won’t need to quickly cut interest rates.

“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in his speech. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

The remarks come after the Fed cut interest rates by a quarter point last week. Investors have lowered their expectations of a similar cut by the Fed at its next December meeting.

Investors’ expectations that the Fed will cut rates by 25 basis points at its December meeting is now 62.4% after Powell’s remarks, compared with 82.5% earlier on Thursday, according to the CME FedWatch tool. 

The latest inflation and employment data was also published on Thursday. The consumer price index for October increased 0.2% taking the 12-month inflation rate to 2.6%.

Meanwhile, weekly jobless claims for the week ending Nov. 9 dropped by 4,000 from the previous week to 217,000, signaling a robust economy.

Investors will turn their attention to further economic data due to be published on Friday, including retail sales, industrial production, and import prices.