Treasuries Move Sharply Lower Ahead Of Jackson Hole Symposium

After ending the previous session modestly higher, treasuries showed a significant move back to the downside during trading on Friday.

Bond prices came under pressure in morning trading and remained firmly negative throughout the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 10.9 basis points to 2.989 percent.

The ten-year yield more than offset the modest drop seen on Thursday, ending the session at its highest closing level in a month.

The steep drop by treasuries may have reflected concerns about the outlook for interest rates ahead of next week’s economic symposium in Jackson Hole, Wyoming.

Remarks by Federal Reserve officials at the annual symposium are likely to be in focus, as traders look for additional clues about the pace of future rate hikes.

Recent comments from some Fed officials have indicated the central bank will continue to raise interest rates aggressively at its next meeting in September.

St. Louis Fed president James Bullard said recently that he expects a third straight 75 basis point interest rate hike in September, while San Francisco Fed colleague Mary Daly said that raising rates by 50 or 75 basis points next month would be “reasonable.”

Kansas City Fed president Esther George argued that the drop in inflation registered in July was not evidence the underlying problem was fixed.

The Jackson Hole symposium is likely to be in the spotlight next week, while traders are also likely to keep an eye on reports on durable goods orders, new home sales, and personal income and spending.

The personal income and spending report due next Friday is likely to attract particular attention, as it includes a reading on inflation said to be preferred by the Fed.

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