U.S. Treasury yields declined on Tuesday as investors considered the outlook for Federal Reserve monetary policy following the latest economic data and remarks from central bank officials.
The yield on the 10-year Treasury was down 3 basis points at 4.459%. The 2-year Treasury yield was last down by one basis point at 4.812%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors considered the latest clues about the path ahead for interest rates as uncertainty around when they may be cut and how many cuts could take place this year persisted. In recent weeks, expectations have moved toward there being fewer rate cuts in 2024 than previously expected, or even none.
On Monday, Richmond Federal Reserve President Tom Barkin indicated that the central bank had time to wait until policymakers were more confident about inflation easing before cutting rates. This was in line with guidance provided by the Fed after its latest meeting earlier this month.
Barkin’s comments came after a weaker-than-expected April jobs report released at the end of last week had buoyed hopes about rate cuts. The report showed that nonfarm payrolls increased by 175,000 in the month, far fewer than the previous estimate of 240,000, and the unemployment rate rose from 3.8% to 3.9%.
More Fed policymakers are slated to make remarks throughout the week, which investors will be watching closely for additional hints about the policy outlook. On the data front, consumer sentiment insights are due at the end of the week. On Tuesday, March consumer credit data is expected.
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