The 10-year U.S. yield reached 1.77% on Tuesday, as the introduction of coronavirus vaccines and planned spending on infrastructure boosted hopes for a broader economic recovery, but added fears of inflation.
The move comes the day before President Joe Biden reveals the details of his infrastructure plan. The recovery package will include up to $ 3 trillion in spending across a range of sectors in a bid to strengthen the U.S. economy.
Meanwhile, the pace Vaccination Covid-19 in the U.S. it is growing, and the Centers for Disease Control and Prevention reports that over 3 million doses have been administered since Sunday for three consecutive days. However, coronavirus cases are also on the rise, with more than 63,000 new daily infections recorded in the U.S., based on a seven-day average of data from Johns Hopkins University.
In the middle there is an increase in yield a growing conversation about inflation, as the US economy begins to recover. There were already concerns that a $ 1.9 trillion stimulus package signed earlier this month could encourage price growth in the midst of an economic recovery from a pandemic.
Unigestion Investment Manager Olivier Marciot said in a note Tuesday that he believes there is a “risk that inflationary pressures will be less transient than expected, increasing the likelihood that the Fed is sitting“ behind the curve ”and will later be forced to change course faster than projected. “
As for the data, the January price index of the house S & P / Case-Shiller should come out on Tuesday at 8 o’clock Central European Time.
Federal Reserve Supervisor Randal Quarles is scheduled to give a speech on the Financial Stability Committee at the Peterson Institute for International Economic Discussion at 9 a.m. ET.
The auction will be held on Tuesday for 42-day accounts of 40 billion dollars.
– Nate Rattner, CNBC, contributed to this report.