Treasury Yields Rise Ahead of Fed Decision as 10-Year Tops 5%

U.S. Treasury yields moved higher Wednesday as investors waited for the Federal Reserve’s interest-rate decision, with the 10-year yield above 5% and traders expecting no change to the central bank’s target range.

The 10-year Treasury note yield, a benchmark for mortgage, auto and credit card borrowing, rose more than two basis points to 5.0134%. The two-year yield, which more closely tracks expectations for Fed policy, added one basis point to 4.7494%. The 30-year yield climbed more than one basis point to 5.3200%. Bond prices generally move in the opposite direction from yields.

Traders priced in a 90.6% chance that the Federal Open Market Committee (FOMC) would leave its target range at 375 to 400 basis points unchanged. They assigned a 76.5% chance to a 25-basis-point increase at the Dec. 9 meeting.

Investors will watch the Fed’s statement after the decision for signals about future policy. Federal Reserve Chair Kevin Warsh is scheduled to hold a news conference at 2:30 p.m. ET (18:30 UTC), 30 minutes after the 2 p.m. ET (18:00 UTC) announcement.

Higher short-term Treasury yields had accompanied stronger expectations for Fed rate increases.

Thursday’s U.S. data slate includes the personal consumption expenditures (PCE) index, the Fed’s preferred inflation gauge, as well as quarterly gross domestic product (GDP) growth and personal income and spending figures.