Treasury yields in focus as investors assess recession risk

The yield on the benchmark US 10-year Treasury note fell to its lowest level in almost two weeks on Thursday as investors continued to assess the likelihood of a recession.

The yield on the 10-year Treasury note was around 4 basis points lower at 3.117%, while the yield on the 30-year Treasury bond fell 3 basis points to trade at 3.21%. Earlier in the session, the 10-year fell below 3.1%. Yields move inversely to prices.

The moves come after Federal Reserve Chairman Jerome Powell told Congress that the US central bank is “strongly committed” to cooling the soaring inflation rate. Market participants are increasingly concerned that aggressive monetary tightening could tip the world’s largest economy into a recession.

“At the Fed, we understand the hardship high inflation is causing,” Powell said to the Senate Banking Committee on Wednesday. “We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so.”

Last week, the Fed increased its benchmark funds rate by 75 basis points, its largest increase since 1994, but it is thought aggressive tightening could mean exerting further downward pressure on growth.

On the data front, initial jobless claims for the week ending June 18 will be released alongside first-quarter current account figures at 8:30 am ET on Thursday.

The S&P global flash manufacturing purchasing managers’ index for June, S&P global flash services PMI for June and Kansas City Fed manufacturing survey composite index for June will all follow slightly later in the session.

— CNBC’s Sarah Min & Elliot Smith contributed to this report.

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