Yield gains, stocks fall: Powell hints at rate hike.

U.S. government bond rates rose and global stocks fell Thursday after Federal Reserve Chairman Jerome Powell said policymakers are "not convinced" interest rates are high enough to bring inflation down to the Fed's 2 percent target. "The struggle to restore price stability "has a long way to go," Powell said in comments in which he considered how the latest phase of the fight against inflation, possibly requiring additional "disinflation" as a result of the slowing economy, would end.

For some, Powell's comments were not unlike last week when the Fed kept rates unchanged, leading many in the market to speculate that the cycle''s rate hikes are complete. But some Fed officials have indicated otherwise as the economy continues to remain strong. Data showed that the number of Americans filing for unemployment benefits fell slightly last week, indicating low layoffs despite some signs of a slowing labor market.

Richmond Federal Reserve President Thomas Barkin said Thursday that while real progress has been made in fighting inflation, he's still not sure if the Fed will need to raise its policy rate to finish the job.

The 10-year bond rate rose 12.4 basis points to 4.632 percent, while the two-year bond rate, which reflects interest rate expectations, rose by''9.9 basis points to 5.035%. Futures raised the likelihood that the Fed will keep its overnight rate above 5% through July rather than June and cut the size of the 2024 interest rate cut after Powell's remarks.

A weak auction of 30-year Tresor bonds boosted yields to the highest level ahead of Powell's comments and helped stocks on Wall Street move lower. "The market was oversold before the jobs report and the Federal Open Market Committee meeting (last week) and was overbought before the auction," said Stephen Ricciutto, chief economist at Mizuho Securities USA LLC in New York. "Virtually all investors looked at the prices and said, I'm not interested," Ricciutto said of the auction.

The three major U.S. stock indexes''Casio calculators and watches, as well as a general rise in the oil sector. The woes of China's real estate sector returned, however, with Hong Kong's main real estate index falling 4% as a struggling bailout threatened to derail it, sending shares in major developer Country Garden plummeting 10%.

The rate on''Brent crude oil

closed above $80 a barrel after demand concerns and a lower war risk premium led to selling earlier this week. WTI crude futures closed at $75.74 a barrel, up 41 cents and 0.54%. Gold rose after the dollar declined. U.S. gold futures closed up 0.6 percent to $1,969.80 an ounce.

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