US 10-Year Yield Slips to Lowest in 4 Months as Investors React to Disappointing ISM Survey

The 10-year yield and other US government bonds slumped on Tuesday, as investors abandoned the prospect of tightening monetary policy following a disappointing ISM survey print of America’s services sector.

The benchmark 10-year yield plummeted to the lowest since February, as fears of an impending sharp increase in inflation began to echo throughout financial markets. The 10-year yield, which moves in opposite direction of its price, had soared to a high of 1.77% earlier in 2021, as investors expected a more hawkish policy crackdown by the Federal Reserve in response to rampant inflation.

The latest ISM services index fell from a record high of 64 to 60.1 in June, while the index of services employment plummeted from 55.3 to 49.3— the lowest since the beginning of the year. The latest figures suggest that although hiring may have accelerated over the past several months, employers continue to struggle to fill vacant positions, meaning that a policy shift from the central bank is not going to happen that soon.

The latest ISM print boosted the rush towards government debt, which has historically performed well during elevated economic uncertainty. Indicators of expected future inflation also fell on Tuesday, as the 10-year breakeven rate plummeted to just above 2.3% at the time of writing. Yields on other government debt, such 20- and 30-year bonds also noted a decline, as investors piled into the long-term Treasuries.


Information for this briefing was found via the Institute for Supply Management. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Goliath Resources Hits 10.60 g/t Gold Over 22.82 Metres, Highest Grade Results In Third Distinct Rock Package At Surebet Discovery

Four Countries Control the Fertilizer That Feeds the World | Sage Potash

$10,000 Gold Is Just A Question of Time | Florian Grummes

Recommended

Antimony Resources Drills 5.27% Sb Over 4.95 Metres In Latest Results

Nord Precious Metals Identifies 29 Veins At Castle East Following 3D Modeling

Related News

Federal Reserve Keeps Rates Unchanged But Plans for March Hike

The Federal Reserve has decided to keep interest rates unchanged for the time being, but...

Thursday, January 27, 2022, 10:04:00 AM

US Unemployment Rate Falls to 3.8%, Wage Growth Stagnates

The US labour market continued to show signs of strengthening, as nonfarm payrolls substantially surpassed...

Saturday, March 5, 2022, 03:14:00 PM

Euro Inflation Soars Past Record as ECB Struggles to Maintain Transitory Narrative

Inflation across the euro area surpassed previous record levels in December, eroding at consumer sentiment...

Monday, January 10, 2022, 02:46:00 PM

Jerome Powell Warns of Ongoing Rate Hikes

Although US inflation is showing signs of easing— albeit slowly, the Fed appears adamant on...

Thursday, February 23, 2023, 03:07:00 PM

US Social Security Benefits Set to Increase by Most in 40 Years

Shortly after the BLS released dismal CPI data showing inflation once again soaring to 40...

Thursday, October 13, 2022, 06:08:14 PM