2018.04.2001:34:00UTC+00U.S. Yields Surges Inflation Expectations Climbs to Multi-Year Highs

Long-dated Treasury yields traded at their highest levels in almost a month, but shorter maturities saw a marginal retreat in rates, as inflation expectations rose to their highest level in almost three years.

The benchmark 10-year Treasury note yield edged up 4.6 basis points to 2.914 percent, after yields advanced by the most in a day since February 14 in the prior session. The benchmark note was hovering near its highest yield level since February 22, according to data from the WSJ Market Data Group.

The two-year note yield edged up 0.4 basis points to 2.433 percent, and has been hanging around its highest level since August 2008.

The spread between the two-year note yield and 10-year note yield, a widely-observed measure of the yield curve, widened significantly to 48 basis points, or 0.48 percentage point, from 41 basis points.

Meanwhile, the 30-year bond yield rose 5.8 basis points to 3.106 percent, the highest since March 21, after reporting its biggest one-day yield increase since February 21.

On Thursday, the yield curve steepened as long-dated government bond helped to taper some of the flattening of the yield curve as a focus point for investors.

But Federal Reserve Governor Randal Quarles said market participants, who are afraid a flattening yield curve is a dangerous sign for the long-term prospects for the economy or that it might foreshadow a recession, are over exaggerating it.