U.S. Treasury Yields Edge Lower After Sharp Monday Increase
The 10-year yield fell to 5.2278% early Tuesday, while markets priced in more than a 72% chance of another Federal Reserve rate increase in October.
U.S. Treasury yields edged lower early Tuesday after rising sharply a day earlier, as persistent inflation concerns continued to influence expectations for Federal Reserve policy.
The 10-year Treasury yield declined about 1 basis point to 5.2278%. The 30-year yield also fell 1 basis point to 5.466%, while the 2-year yield was little changed at 4.9243%.
Yields and bond prices move in opposite directions. One basis point equals 0.01 percentage point.
The 10-year yield rose 5 basis points Monday, while the 2-year yield gained 6 basis points. The increase pushed borrowing costs higher as Treasury yields reached multiyear highs amid concerns about inflation and rising government debt.
Market pricing implied a more than 72% chance of another Federal Reserve rate increase at the central bank’s October meeting. The Federal Open Market Committee voted 12-0 earlier this month to raise its main interest rate by 25 basis points.
Investors are also awaiting several economic reports this week. The schedule includes the August JOLTS report, the core personal consumption expenditures index, quarterly gross domestic product, nonfarm payrolls and the unemployment rate.
Higher oil prices and ongoing inflation concerns are adding to the pressure on markets as investors assess the Federal Reserve’s next policy moves.
