* U.S. 10-year rises from four-month low * U.S. 2/10-year yield curve hits deepest inversion since 2000 * U.S. 3-month/10-year briefly inverts, last steeper on the day (Adds new comment, bylines, datelines, table, bullets, updates prices) By Gertrude Chavez-Dreyfuss, Dhara Ranasinghe and Tom Westbrook NEW YORK/LONDON/SINGAPORE, Aug 2 (Reuters) – U.S. Treasury yields rose on Tuesday in volatile trading, as investors focused more on growth and attractive returns in the world's largest bond market, and worried less about global tension arising from U.S. House of Representatives Speaker Nancy Pelosi's reported visit to Taiwan. The U.S. benchmark 10-year yield rallied from a four-month low of 2.516% to last trade 4 basis points higher at 2.650% . "The bottom line is that growth prospects in Europe are really terrible, compared to the U.S., given the energy crisis," said Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York. "U.S. rates are also dramatically higher than almost all European rates." The focus on Pelosi's Taiwan trip, while important because of the geopolitical implications, eased a bit, as investors surmised that a diplomatic resolution will somehow be worked out. Pelosi is expected to arrive in Taipei later in the day, people briefed on the matter said, as several Chinese warplanes flew close to the median line dividing the Taiwan Strait, a source told Reuters. "There was certainly a flight to safety earlier, but it's not a big deal any more in the U.S. session. The 10-year yield had a huge overnight move," Infrastructure's Hatfield said. "China has threatened to shoot her plane down, but it's very unlikely. Even if there's one in a million chance that it happens, people are still nervous. I think this will be a tail event that will happen, but will go away," he added. China has repeatedly warned against Pelosi going to Taiwan, which it claims as its own, while the United States said on Monday that it would not be intimidated by Chinese "sabre rattling". Longer-dated Treasuries were already well bid since weakening U.S. economic data has markets expecting a slowdown in both U.S. growth and the pace of interest rate hikes. The 10-year yield's fall briefly pushed the gap over three-month Treasury yields to -1.6 basis points US3MUS10Y=TWEB>. That curve was last steeper on the day at 10 bps. This is the latest part of the U.S. yield curve to move into inverted territory, in a further sign that U.S. recession risks are mounting. On the shorter-end of the curve, U.S. two-year yields were up 6.2 bps at 2.9714%. A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes deepened its inversion to -35.50 basis points, the most inverted since 2000. An inversion of this yield curve typically foreshadows recession. August 2 Tuesday 10:40AM New York / 1440 GMT Price Current Net Yield % Change (bps) Three-month bills 2.455 2.5048 -0.041 Six-month bills 2.87 2.9527 0.003 Two-year note 100-9/256 2.9816 0.073 Three-year note 100-68/256 2.905 0.080 Five-year note 100-24/256 2.7297 0.062 Seven-year note 99-124/256 2.7064 0.047 10-year note 101-252/256 2.6432 0.038 20-year bond 101-168/256 3.1368 0.019 30-year bond 98-192/256 2.9381 0.013 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 26.00 0.25 spread U.S. 3-year dollar swap 11.00 0.75 spread U.S. 5-year dollar swap 3.50 0.25 spread U.S. 10-year dollar swap 6.50 0.75 spread U.S. 30-year dollar swap -28.25 1.25 spread (Reporting by Tom Westbrook in Singapore and Dhara Ranasinghe in London; Editing by Christina Fincher and David Holmes )
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The Inflation Reduction Act, which awaits a House vote, has few if any of the taxes on individuals that Democrats originally called for.
The University of Michigan's preliminary August reading on the overall index on consumer sentiment came in at 55.1, up from 51.5 in the prior month. "All components of the expectations index improved this month, particularly among low- and middle-income consumers for whom inflation is particularly salient," survey director Joanne Hsu said in a statement. Indeed, the survey's one-year inflation expectation fell to a six-month low of 5.0% from 5.2%, while its five-year inflation outlook edged up to 3.0% from 2.9%, holding within a range that has prevailed for the past year.
U.S. automakers and dealers are scrambling to figure out if they can still offer $7,500 tax credits to would-be buyers of electric vehicles (EVs), as Congress prepares for final votes today on a bill that includes a top-to-bottom overhaul of Washington's clean vehicle policies. Under the $430 billion climate, health care and tax bill that the House of Representatives is set to vote on Friday, rules governing the current $7,500 EV tax credit aimed at persuading consumers to buy the vehicles would be replaced by incentives designed to bring more battery and EV manufacturing into the United States. Manufacturers, dealers and consumers do not have answers to many basic questions about how the new rules will affect the way clean vehicles aimed at consumers – including fully electric and hybrid models – will be bought, sold and built, automakers, consultants and lobbyists said.
Investors are hoping a softer economy will yield lower commodity prices. They're probably not right, warns Goldman Sachs.
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The U.S. Federal Reserve's plan to unwind its bond-bloated balance sheet has taken a backseat to its dramatic interest rate hikes of recent months – but it may make a comeback at Jackson Hole. There's probably not much more guidance Fed chief Jerome Powell can give markets on the policy rate outlook at the annual central bank get-together in the Wyoming resort later this month – not least because the Fed itself admits there's little long-term visibility on inflation or the economy right now. The Fed's stance on rates seems fairly clear – it will continue to lift them, even into restrictive territory, and hold them there until it sees inflation and inflation expectations are on a sustainable path down toward its 2% target.
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Canada's inverted yield curve is signaling the Bank of Canada may raise interest rates to a level that triggers a recession, placing the central bank in a tough spot as it aims to tame high inflation and engineer a "soft landing" for the economy. Canada's economy is likely to be particularly sensitive to higher interest rates after Canadians borrowed heavily during the COVID-19 pandemic to participate in a red-hot housing market. "It makes sense that we should see more of an inversion this cycle than we have in the last few just because there is so much more of a central bank overtightening component to this," said Andrew Kelvin, chief Canada strategist at TD Securities.
Senate Democrats announced a deal on a $700 billion Inflation Reduction Act that aims to reduce inflation by paying down the national debt, lowering energy costs and extending affordable healthcare coverage for millions of Americans. This proposed legislation will need the … Continue reading → The post Inside the $700 Billion Inflation Reduction Act appeared first on SmartAsset Blog.
Ten- and 30-year Treasury yields soared on Thursday after the latest signs of easing U.S. inflation buttressed a more optimistic outlook on the U.S. economy. The yield on the 2-year Treasury (BX:TMUBMUSD02Y) rose 1.3 basis points to 3.227% from 3.214% as of Wednesday afternoon. The yield on the 30-year Treasury (BX:TMUBMUSD30Y) rose 13.2 basis points to 3.173% from Wednesday’s level of 3.041%.
Russia's economy shrank 4.0% year-on-year in the second quarter of 2022, the first full quarter of what Russia calls a "special military operation" in Ukraine, preliminary data from the federal statistics service Rosstat showed on Friday. The economy is plunging into recession after Moscow sent its armed forces into Ukraine on Feb. 24, triggering sweeping Western restrictions on its energy and financial sectors, including a freeze of Russian reserves held abroad, leading scores of Western companies to quit the market. Rosstat did not provide any further details but analysts said the contraction had been caused by weakness in consumer demand and the aftermath of sanctions.
Optimism is seeping back into the U.S. stock market, as some investors grow more convinced that the economy may avoid a severe downturn even as it copes with high inflation. The benchmark S&P 500 has rebounded about 15% since mid-June, halving its year-to-date loss, and the tech-heavy Nasdaq Composite is up 20% over that time. Many of the so-called meme stocks that had been pummeled in the first half of the year have come screaming back, while the Cboe Volatility Index, known as Wall Street’s fear gauge, stands near a four-month low.
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With $3 billion in new funding available, officials toured an endangered sewer line next to a creek with eroded banks.


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