TREASURIES-Yields gain as inflation, personal income rise

(Adding data, updating prices) By Karen Brettell NEW YORK, Dec 23 (Reuters) – U.S. Treasuries rose on Friday after data showed that the Personal income rose more than expected in November while inflation data for October was updated, supporting speculation that the Federal Reserve will continue to raise rates. because it is struggling with strong price pressure. Personal income rose 0.4% in the month, beating economists’ expectations for a 0.3% gain. Personal consumption expenditures (PCE) rose 0.1% last month and October business profits were revised up to 0.4%, from 0.3%. In the 12 months through November, PCE prices rose 5.5% after advancing 6.1% in October. Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.1% in November, while data for October was revised upward to show spending amounting to 0.9% instead of 0.8% as mentioned earlier. “There were a few surprises,” said Zachary Griffiths, senior investment strategist at CreditSights in Charlotte, North Carolina. is still meaningless and I don’t think this number will change anything if the narrative continues with the Fed possibly tightening a little more in 2023,” he said. American consumers expect pressure on prices to moderate next year, with a benchmark survey on Friday showing one-year inflation fell to an 18-month low in December. year received 7 points for 4.330%. The inversion of the yield curve between the two-year and 10-year yields was returned from around 2 points to minus 58 points. is assessing the Fed’s rate of interest rate hikes. such rate b reduces inflation, but also looks at the possibility of a recession expected in the coming years. Fed officials expect but the interest rate will increase by more than 5% of the Fed next year, and Fed Chairman Jerome Powell emphasized the need to keep rates high for a while. “There is no question that Fed speech remains hawkish going forward,” BMO Capital Markets analysts Ian Lyngen and Benjamin Jeffery said in a report on Friday. “We still see the possibility of upward pressure on the final product … (if) the market recognizes that although the global economy may face a series of headwinds in 2023, Powell is trying hard to restore the Fed confidence lost. But it took decades to gain,” they said. Traders in Fed futures are pricing in a more dovish scenario than the US central bank, with the expected funding rate will rise to 4.91% in May and fall to 4.46% by the end of the year. It may be wrong to think that they will start soon next year. the policy is not as high as the ‘dot plot’ suggests but keeps it long more,” he said. Meanwhile, analysts have cautioned against reading too much into market movements this week, with volumes falling and expected to worsen over the Christmas holiday and It’s a new year when many sellers are out, or don’t want to take the risk. The bond market closed on Friday at 2pm EST and will close on Monday. December 23 Friday 14:04 PM New York / 1904 GMT Current Currency Price % Change (bps) Three-month Bill 4.2325 4.3351 0.003 Six-month Bill 4.515 4.6816 0.003 Three-year Note 10067 4.259-69 6. -190/ 256 4.0927 0.071 Five-year note 100-14/256 3.8622 0.075 Seven-year note 100-60/256 3.8358 0.067 10-year note 103-20/2456 4.0.256 40.3-20/256 40.3-20/256 3-year bond 3.8358 0.067 /256 3.8235 0.099 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) US 2-year dollar swap 27.75 -1.00 spread US 3-year dollar swap 13.25 -0.25 US dollar swap 5-3 year -0.25 swap spread 10 US year -3.75 -0.25 spread US 30-year swap -42.50 -0.25 spread (Reporting by Karen Brettell; Editing by Jonathan Oatis and Josie Kao)

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