U.S. Treasury yields fell on Wednesday as investors awaited the Federal Reserve’s latest interest rate decision and guidance on what could be next for central bank policy.
At 4:04 a.m. ET, the yield on the 10-year Treasury was down by over three basis points to 3.405%. The 2-year Treasury was trading at 3.949% after declining by around three basis points.
Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.
The Federal Reserve is due to announce its latest policy moves on Wednesday. That will include a decision about interest rates, which many investors are expecting to be hiked by 25 basis points.
Investors are also hoping for hints about the policy outlook from guidance issued alongside the rate decision and the press conference that is set to take place after the meeting.
That could include clues about whether further rate hikes are on the table or a pause to rate increases is imminent, and how long rates may have to stay elevated for before they can be cut.
Concerns about elevated rates leading to economic downturn have spread in recent weeks. Since the Fed’s last meeting, officials have indicated that rate hikes could be halted, but that inflation is still too high to consider rate cuts.
Also on Wednesday, ADP’s latest private payrolls report is due. Economists surveyed by Dow Jones are expecting businesses to have added 133,000 jobs in April – fewer than March’s 145,000. April’s ISM non-manufacturing purchasing managers’ index report, which tracks business activity in the services sector, is also expected.
