US Treasury yields were mixed on Thursday morning, before the weekly unemployment insurance claims were released.
Investors are likely to be poring over the latest Labor Department updates on unemployment insurance claims, which will be released at 8:30 am ET, in light of last week. highly successful payroll report. Economists polled by Dow Jones expect unemployment insurance claims for the first time to total 694,000 in the week ended April 3.
Yields have recently increased due to concerns over inflation amid the economic recovery from the coronavirus pandemic. However, the Federal Reserve indicated at its March policy meeting that it would let inflation exceed its long-term target of 2% if it helped achieve full employment.
Minutes from Fed March meeting, released on Wednesday, confirmed that it will maintain its accommodative policy until economic “results” are achieved.
Sarah Hewin, head of research for Europe and the Americas at Standard Chartered Bank, told CNBC’s “Squawk Box Europe“On Thursday, it looked like the Fed had considered some of the improvements seen in economic data since that last meeting.
“So I think they, to a large extent, are accounting for some very high payroll numbers in the coming months,” she said, but added that the uncertainty is about “how far the current strength of the economy persists.”
However, Hewin pointed to a study released by the New York Fed yesterday, which highlighted that many of the recent stimulus checks were being put into savings and to pay debts, rather than being spent. She suggested that it was “wise” for the Fed to take a “cautious approach at this stage” of policy.
She added, “there is still a huge output gap and, from the Fed’s point of view, that gap needs to be closed in order for inflation to return to the target and, in fact, stay above the target for a while.”
Fed Chairman Jerome Powell is due to deliver a speech at the International Monetary Fund’s Global Economy Debate at 12 noon. ET on Thursday.
The auctions will be held on Thursday for $ 40 billion in 4-week accounts and $ 40 billion in 8-week accounts.
– CNBC’s Thomas Franck contributed to this report.