TREASURIES-U.S. yields rise after Q4 GDP data

BY Reuters | ECONOMIC | 01/26/23 08:54 AM EST

NEW YORK, Jan 26 (Reuters) - U.S. Treasury yields rose on Thursday after economic output data beat expectations.

Benchmark U.S. Treasury 10-year yields rose over two basis points after the data and were last seen at 3.511%, while two-year note yields - which tend to more closely reflect monetary policy expectations - rose nearly three basis points and were last seen at about 4.18%.

GDP increased at a 2.9% annualized rate last quarter, the Commerce Department said in its advance fourth-quarter GDP growth estimate on Thursday. The economy grew at a 3.2% pace in the third quarter. Economists polled by Reuters had forecast GDP rising at a 2.6% rate. (Reporting by Davide Barbuscia; Editing by Chizu Nomiyama)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

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