Treasury yields drop in Asia after Fed’s Brainard sounds dovish

Treasury yields in the US retreated in Asia as Fed rate hike bets dropped after Fed’s Brainard said the central bank should avoid removing support for the US economy too quickly.

At the time of writing, the benchmark 10-yr treasury yield was down 2.3 basis points to 1.649%. The yield clocked a high of 1.698%. The 2-yr yield, which mimics short-term interest rate expectations, declined 1.6 basis points to 0.758%.

The long duration yields were on the rise on expectations Brainard would come out dovish and prepare ground for a rate hike in September. Furthermore, sell-off in bonds across the globe on fears the central bank liquidity tap is drying up also added to the bullish tone around the treasury yields.