U.S. Treasury yields fell on Wednesday as investors considered the path ahead for interest rates and awaited fresh comments from Federal Reserve Chairman Jerome Powell.
At 4:14 a.m. ET, the 10-year Treasury
yield was down by less than one basis point to 3.7601%. The 2-year Treasury
yield was last trading at 4.7451% after falling by almost two basis points.
Yields and prices have an inverted relationship and one basis point equals 0.01%.
Investors awaited the latest remarks from Powell, who will speak alongside central bank officials from around the world at the European Central Bank Forum on Central Banking in Sintra, Portugal, on Wednesday.
Chiefs from the Bank of England, European Central Bank and Bank of Japan will join Powell. Investors are hoping to gain fresh insights into what policymakers expect for interest rates and inflation going forward.
The central banks have taken varying approaches to their interest rate policies recently. The Fed and Bank of Japan chose to keep rates steady, while the Bank of England and European Central Bank increased interest rates by 50 and 25 basis points respectively.
Powell has recently indicated that further interest rate hikes are expected in the U.S. as the central bank’s policy goals of easing the economy and cooling inflation have not yet been fully reached.
This comes as economic data has reflected resilience in the economy and has prompted markets to price in another rate hike when the Fed meets in July.
No key data is expected Wednesday, however investors are looking ahead to Friday’s personal consumption expenditure price index report, which is the Fed’s favored inflation measure.