Central Banks fuel fresh expectations on tighter fiscal policies

U.S. Treasury yields rose on Monday morning, starting the first trading day of November on a positive note, as investors look ahead to the two-day Federal Reserve meeting later this week.

The yield on the benchmark 10-year Treasury note climbed by 4 basis points to 1.593% at 11:30. The yield on the 30-year Treasury bond added 4 basis points, rising to 1.985%. Yields move inversely to prices and 1 basis point is equal to 0.01%.

Short-term bond markets have reacted to recent signals by policy makers in Canada and the U.K. The U.S. inflation rate hit a 13-year high recently, triggering a debate about whether America is entering an inflationary period similar to the 1970s.

Stubborn inflation across more wealthy economies last week prompted a collapse across bond markets as investors began expecting central banks to quickly tighten monetary policy.

All eyes this week will be on the U. S. Fed which is likely to begin winding down its $120 billion asset purchase program with an eye toward ending those purchases by next June 2022.