U.S. Treasuries had a solid showing today, primarily shorter-dated securities
Bolstered by a market-friendly PPI reading this morning that kept rate-hike concerns for the July FOMC meeting in check.
Oil prices eventually moderated, providing more cover for the Treasury market to engage in a bull-steepener trade that was aided by New York Fed President Williams’ (FOMC voter) view that there are encouraging reasons to think inflation has peaked. Fed Governor Cook (FOMC voter), however, later asserted that if there are no signs of disinflation soon, then she would be prepared to act (i.e., vote for tighter monetary policy).
Fed Governor Warsh, for his part, finished his semi-annual monetary policy report in front of the Senate Banking Committee today, but there were no revelations during his appearance that moved the market.
Yields:
2-yr: -6 bps to 4.13%
3-yr: -6 bps to 4.18%
5-yr: -6 bps to 4.26%
10-yr: -4 bps to 4.55%
30-yr: -1 bp to 5.08%