U.S. Treasury yields edged higher on Wednesday as investors awaited the policy statement from the Federal Reserve’s two-day meeting, where it is expected to leave interest rates steady.
What are Treasurys doing?
The 10-year Treasury note yield TMUBMUSD10Y, +1.21% rose 2.4 basis points to 2.082%, a day after plumbing a 21-month low, while the 2-year note yield TMUBMUSD02Y, +2.19% climbed 3.1 basis points to 1.893%. The 30-year bond rate TMUBMUSD30Y, +0.46% was up 0.7 basis point to 2.559%. Debt prices move in the opposite direction of yields.
What’s driving Treasurys?
The Fed will conclude its two-day meeting and issue its policy statement at 2 p.m. Eastern, followed by a press conference held by Fed Chairman Jerome Powell. Analysts expect the central bank to stand pat and leave interest rates unchanged at a range between 2.25% to 2.50%, but to open the door to a rate-cut later this year.
The Fed has been under immense pressure to ease policy even as some say economic data has yet to point to an imminent recession. Short-term rates and fed fund futures have priced in more than one cut before the end of this year.
President Donald Trump has repeatedly called for Powell to cut rates, with a report suggesting that the White House contemplated demoting the current Fed Chairman.
See: All eyes are on Fed meeting, but more hinges on G-20
Read: Fed finds itself in a ‘tough spot’ as 10-year Treasury yield slides to 21-month low
What did market participants say?
“You have to see what Powell is saying. He will do what it takes to keep the expansion running,” David Norris, head of U.S. credit at TwentyFour Asset Management, told MarketWatch.
He said the Fed was unlikely to carry out a rate cut at this week’s meeting.
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