U.S. Treasury yields were slightly higher on Tuesday as investors looked to economic data for hints about the state of the economy ahead of the Federal Reserve’s meeting.
At 4:07 a.m. ET, the yield on the 10-year Treasury was up by around two basis points to 4.6343%. The 2-year Treasury yield was last at 4.9809% after rising by less than one basis point.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors awaited economic data and looked to the Federal Reserve’s meeting, which is due to begin Tuesday and conclude Wednesday with a fresh interest rate decision and press conference. Investors are hoping to get fresh guidance about the outlook for interest rates as questions about when rates will be cut and how many cuts could come this year have been top of mind.
Markets had been hoping that rates would be cut as soon as June, but this timeline has since moved to September after recent economic data has suggested that inflation is persistent and the economy remains resilient.
Last week, the personal consumption expenditures price index, the Fed’s favored inflation gauge, came in slightly above expectations for March. Headline PCE rose by 2.7% on an annual basis, while core PCE, which strips out food and energy costs, reflected a 2.8% increase from a year earlier.
On Tuesday, investors will be watching out for consumer confidence insights before a series of labor market data is due later in the week. This includes job openings figures for March as well as April’s nonfarm payrolls report.
Elsewhere, a euro zone gross domestic product reading for the first quarter, as well as preliminary inflation figures for the single currency area are due Tuesday.
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