NEW YORK (1/6/13)--Yields on 10-year U.S. Treasury bonds hit their highest level since 2011 on Thursday--the day before a public speech by Federal Reserve Chair Ben Bernanke.
The benchmark on 10-year notes hit a 30-month high of 3.05% before finishing the trading day at 2.99%. The return fluctuated little last week, however, after steadily increasing during the previous six weeks.
The increased yield indicates that investors are expecting higher inflation and interest rates as economic growth picks up steam, according to Credit Suisse interest-rate strategist Ira Jersey (Bloomberg.com Jan. 3).
Bernanke, who gave a speech Friday at the American Economic Association gathering in Philadelphia, is retiring as Fed chair Jan. 31 (CNBC.com Jan. 3).
In December, he announced that the Federal Reserve would start cutting back its $85 billion monthly asset-purchasing program by $10 billion, citing an improved job market and stronger economic growth.
Analysts have predicted, however, that a report published this week will show that hiring in December "slipped," according to Bloomberg.