U.S. Treasury yields nudged lower on Thursday as investors continue to assess the prospect of a recession.
As the second quarter draws to a close on Thursday, concern over a slowing economy and aggressive interest rate hikes from the Federal Reserve continue to dominate market sentiment.
Fed Chairman Jerome Powell on Wednesday said that policymakers would not allow inflation to take hold of the U.S. economy over the longer term.
Speaking at a European Central Bank forum, Powell said it’s important to arrest long-term inflation expectations so that they don’t become entrenched and create a self-fulfilling cycle.
“We’re strongly committed to using our tools to get inflation to come down. The way to do that is to slow down growth, ideally keeping it positive,” he said. “Is there a risk that would go too far? Certainly, there’s a risk. I wouldn’t agree that it’s the biggest risk to the economy. The bigger mistake to make … would be to fail to restore price stability.”
Market participants on Thursday will monitor a fresh batch of economic data. Initial jobless claims for the week ending June 18, personal income figures for May and consumer spending data for May will be released at 8:30 a.m. ET.
The core personal consumption expenditures price index — the Fed’s preferred inflation gauge — will be released at the same time, while the Chicago Purchasing Managers’ Index for June is scheduled to be published at 9:45 a.m. ET.
The Treasury will auction $35 billion in 4-week bills and $30 billion in 8-week bills on Thursday.
— CNBC’s Jeff Cox & Elliot Smith contributed to this report.