TREASURIES-U.S. bond yields dip before Powell's encore in Congress
* Yield curve steepens before Powell's appearance before Senate * U.S. core consumer inflation posts biggest rise in a year * U.S. 10-year yield touches 2-week low, 2-year below 9-year peak (New throughout, updates prices, market activity and comments) By Richard Leong NEW YORK, March 1 (Reuters) - U.S. Treasury yields slipped on Thursday with the 10-year yield hitting a two-week low ahead of Federal Reserve Chairman Jerome Powell's appearance before a Senate panel, his second in front of U.S. lawmakers this week.
Powell's upbeat assessment of the U.S. economy before the House Financial Services Committee on Tuesday sparked worries the U.S. central bank may quicken its pace of interest rate increases. Bets have grown that the Fed may raise short-term rates four times in 2018, one more than policy makers projected in December.
Two days of sharp losses on Wall Street, together with disappointing data on housing and regional factory activity, raised speculation Powell may soften his tone to quell jitters about raising borrowing costs to a point that could slow business and consumer spending.
Powell is scheduled to testify on the economy before the Senate Banking Committee at 10 a.m. (1500 GMT).
"If economic strength continues at current speeds through the third quarter and inflation’s trajectory steepens, four rate hikes are a distinct option for the Fed," said Jim Vogel, interest rate strategist at FTN Financial in Memphis, Tennessee.
On the data front, the Commerce Department said U.S. consumer prices increased in January, with a gauge of underlying inflation posting its largest gain in 12 months, bolstering views that price pressures will accelerate this year.
At the same time, the Labor Department said first-time filing for unemployment benefits fell to a 48-year low last week.
At 9:37 a.m. (1437 GMT), benchmark 10-year Treasury yield was 2.848 percent, down 2.0 basis points from late on Wednesday. It fell to a two-week low of 2.824 percent earlier Thursday, Reuters data showed.
The two-year yield fell to 2.250 percent after hitting a nine-plus year high of 2.286 percent on Wednesday.
The spread between five-year and 30-year yields was 50.2 basis points, wider than the 48.2 basis points late on Wednesday, Tradeweb data showed. March 1 Thursday 9:38AM New York / 1438 GMT Price US T BONDS MAR8 144-19/32 5/32 10YR TNotes MAR8 120-220/256 7/32 Price Current Net Yield % Change (bps) Three-month bills 1.625 1.6543 -0.005 Six-month bills 1.8175 1.8597 0.005 Two-year note 100 2.25 -0.012 Three-year note 99-144/256 2.4039 -0.014 Five-year note 100-4/256 2.6216 -0.028 Seven-year note 99-216/256 2.7747 -0.027 10-year note 99-40/256 2.8478 -0.020 30-year bond 97-128/256 3.1291 0.001 YIELD CURVE Last (bps) Net Change (bps) 10-year vs 2-year yield 59.60 -1.15 30-year vs 5-year yield 50.60 2.35 DOLLAR SWAP SPREADS Last (bps) Net Change (bps) U.S. 2-year dollar swap 26.25 -1.75 spread U.S. 3-year dollar swap 22.25 -2.00 spread U.S. 5-year dollar swap 10.50 -0.25 spread U.S. 10-year dollar swap 1.00 -0.25 spread U.S. 30-year dollar swap -19.00 -0.75 spread (Reporting by Richard Leong; Editing by David Gregorio)
