U.S. Treasury yields were little changed Wednesday as markets reopened after the Fourth of July holiday and investors looked ahead to the release of the Federal Reserve’s latest meeting minutes.
At 5:24 a.m. ET, the yield on the 2-year Treasury was last trading 5 basis points lower at 4.886%. The benchmark 10-year Treasury was dipped 2 basis points to 3.837%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
Investors awaited the release of minutes from the Fed’s June meeting and remarks from New York Fed President John Williams, hoping that they would provide fresh clues about the monetary policy outlook.
Since the last Fed meeting, policymakers including central bank chief Jerome Powell have repeatedly indicated that further interest rate hikes will likely be needed to bring inflation down and cool the economy. Powell has also suggested that rate increases could be announced at a pace that is faster than previously anticipated.
This comes after the central bankers kept rates unchanged at their June meeting, noting that the pause allowed officials to consider fresh data and the impact of previous rate hikes.
According to CME Group’s FedWatch tool, traders are currently pricing in a 88.7% chance of the Fed hiking rates again at its July meeting.
Investors also looked ahead to new labor markets data expected later in the week, including JOLTs job openings and ADP’s employment change report on Thursday — and June’s jobs report on Friday. These data points are likely to inform the Fed’s next policy move as well as provide clues about the state of the U.S. economy.
