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Treasury Yields Steady As Markets Await New Clues On Economic Growth, Inflation

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The Federal Reserve meeting on Tuesday and Wednesday is not expected to produce any changes in monetary policy and little change in the tenor of Chairman Jerome Powell’s remarks, which will convey optimism about the economy but concern about the remaining risks and the need to maintain easy money until maximum employment is reached.

Wells Fargo analyst Michael Schumacher told CNBC that the 10-year yield could hit 2.1-2.4% by year-end, which he considers an aggressive forecast. Larry Lindsey, the former director of the National Economic Council, is more aggressive, however, predicting 3% by the end of this year.

For now, that benchmark yield is oscillating between 1.5 and 1.6%, with a spike above that range a week ago.

If GDP growth comes in much higher than the consensus 6.9%, or new jobless claims come in significantly lower than the 550,000 forecast, investors may react, anticipating stronger increases in inflation if the economy is running hotter than expected.

Meanwhile, the European Central Bank is following through on its pledge to speed up its emergency bond purchases to support the lagging European economy. The ECB bought a net €22.25 billion in the week to Apr. 23, an increase of more than a third from the previous

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