Treasuries slid after Federal Reserve chair Janet Yellen delivered her semi-annual Congressional speech, US capital markets correspondent Eric Platt reports. Odds of a March rate rise climbed to 34 per cent on Tuesday.
Tuesday, February 14 is in the books. This is the "New York Minute." action in US markets was dominated by Fed chair Janet Yellen's semiannual congressional testimony, where she said the US central bank would consider raising interest rates at upcoming meetings, plural. Investors and traders said the speech had a slight hawkish tone, which propelled a sell-off in treasuries.
Yields on a 2-year note climbed 3 basis points to 1.23%, while the 10-year climbed 4 basis points to 2.47%. Markets quickly began repricing expectations of future rate increases. Odds that the US central bank will tighten policy by 75 basis points this year increased to 34%, according to calculations on federal funds futures. That's up from 30% right before her speech.
Stock markets recovered from a soft morning with the S&P 500 closing 0.4% higher, at 2,338, led by the financial sector and the US dollar advance. Volatility slid, with the CBO's VIX index dropping back below 11. One stock drumming up headlines is Goldman Sachs. Shares of the investment bank hit a new all-time high, eclipsing a record set in October 2007. Banks have been boosted by expectations of faster economic growth, lower taxes, and a later regulatory regime. And that is the "New York Minute."