United States

U.S. Treasury Yields Inch Higher With Omicron in Focus

Andrew Kelly | Reuters

U.S. Treasury yields inched higher Tuesday as omicron developments remained in focus for investors.

The yield on the benchmark 10-year Treasury note was marginally higher at 1.482% by 4:05 p.m. ET, while the yield on the 30-year Treasury bond rose 1.6 basis points to 1.902%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Bond markets reopened Monday after closing for the Christmas Eve holiday Friday. Investors have been encouraged by some positive news on the omicron Covid variant.

The Centers for Disease Control and Prevention announced on Monday that it was shortening its isolation recommendation for people who test positive to five days from 10 if those people do not have symptoms.

Research out of South Africa indicated that omicron infections can help boost immunity to the earlier delta strain of Covid. A few studies in South Africa, Scotland and England also suggested that people infected with the omicron coronavirus variant were less likely to be admitted to hospital than if they contracted other strains.

A number of reports released last week indicated a stable U.S. economy with improving labor and spending trends. However, inflation remains high.

"We expect interest rates to move modestly higher in 2022 based on near-term inflation expectations above historical trends and improving growth expectations once the impact of COVID-19 variants recede," Lawrence Gillum, fixed income strategist for LPL Financial, said in a note Tuesday.

Data released on Tuesday include the S&P CoreLogic Case-Shiller National Home Price Index for October, the Richmond Fed survey for December and the Dallas Fed services activity data for this month.                         

—CNBC's Matt Clinch and Jessica Bursztynsky contributed to this article.

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