U.S. Treasury yields declined on Wednesday as investors awaited the Federal Reserve’s latest interest rate decision and hoped for guidance about future monetary policy from Fed officials.
At 4:31 a.m. ET, the yield on the benchmark 10-year Treasury was down by just over five basis points to 3.4772%. The 2-year Treasury yield was last trading at 4.1929% after falling by more than one basis point.
Yields and prices move in opposite directions and one basis point equals 0.01%.
The Fed’s first meeting of the year is expected to conclude later on Wednesday with a fresh interest rate policy announcement. Investors are broadly anticipating the central bank to hike rates by 25 basis points as its fight against persistent inflation continues.
That would be a further slowdown of the pace of rate hikes after the Fed implemented four consecutive 75 basis point increases, followed by a 50 basis point hike, at its last five meetings.
Investors are also hoping for hints about future interest rate policy, including whether the Fed could pause rate increases this year. Concerns about rates being hiked too high and too quickly and therefore leading to a recession have spread among investors in recent months.
On the data front, ISM’s manufacturing purchasing managers’ index report for January, which reflects whether factory activity is expanding or contracting, is due. The previous two readings indicated a slowdown of activity.
JOLTs job openings figures for December are also expected and will provide fresh insights into the labor market.
This report’s information was first seen on CNBC; to read more, click this link.
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