U.S. Treasury yields rose on Tuesday as investors considered the state of the economy and awaited fresh economic data as they mulled over the outlook for interest rates.
At 4:26 a.m. ET, the yield on the 10-year Treasury was more than three basis points higher at 4.7458%. The 2-year Treasury yield was last up by less than one basis point to 5.1071%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors assessed the economic outlook as they considered whether the Federal Reserve will hike interest rates further or not.
Despite the Fed saying it expected one further rate hike this year at its last meeting, several policymakers have since said they do not believe rates need to go any higher. Some have cited recent Treasury yield highs as a reason for this, saying they have led to tighter financial conditions which in turn could help ease the economy.
Philadelphia Fed President Patrick Harker said last week that economic data suggested to him that no further rate hikes are necessary and keeping them at their current level would allow their impact to fully unfold.
Various other Fed officials are due to speak this week, including central bank Chairman Jerome Powell. The Fed’s next interest rate decision is expected on Nov. 1, and markets are pricing in an around 90% chance that rates will be left unchanged then, according to the CME FedWatch tool.
On the data front, retail sales and industrial production figures for September, as well as the latest housing market index are expected on Tuesday.
Elsewhere, investors continued to monitor the Israel-Hamas war ahead of President Joe Biden’s visit to Israel on Wednesday, and watched out for corporate earnings reports, including from major banks.
