Treasury yields tumble as investors weigh debt ceiling talks, Fed rate policy

U.S. Treasury yields declined on Monday as investors fretted over debt ceiling deal negotiations and assessed what could be next for Federal Reserve interest rate policy after mixed messages from officials.

At 4:03 a.m. ET, the 10-year Treasury was trading more than four basis points lower at 3.6497%. The yield on the 2-year Treasury was last down by over six basis points to 4.228%.

Yields and prices move in opposite directions and one basis point equals 0.01%.

Talks about a debt ceiling deal are set to continue Monday, with President Joe Biden and House Speaker Kevin McCarthy being expected to meet for negotiations. If a resolution is not found, the U.S. risks defaulting on its debt as soon as June 1.

Talks stalled late on Saturday as the two sides struggled to come to an agreement. On Sunday, Biden called for the Republicans to “move from their extreme position”, while McCarthy told reporters that Biden needed to “get away from the socialist wing of the Democratic party and represent America.”

They would both need to compromise to reach a deal, McCarthy added.

This report’s information was first seen on CNBC; to read more, click this link.