U.S. Treasury yields remained relatively unchanged on Tuesday as investors awaited fresh economic data and the conclusion of the Federal Reserve’s September meeting. As of 2:48 a.m. ET, the yield on the 10-year Treasury slightly increased by less than one basis point to 4.3246%, while the 2-year Treasury yield slightly decreased by less than one basis point to 5.0624%.
The Federal Reserve is expected to announce its next interest rate policy decision on Wednesday, signaling the end of its September meeting. It is widely anticipated that the central bank will maintain rates at their current levels. However, there is still uncertainty regarding future monetary policy. Investors will closely analyze the comments made by the Fed alongside the interest rate decision and during the subsequent press conference for insights into the future outlook for rates.
Some Fed officials have recently hinted at the possibility of further rate hikes, considering economic data as a crucial factor. Recent data has shown resilience in the economy and inflation levels that are within tolerable limits. These factors may influence the Fed’s decision on interest rates in the coming months.
The Fed initiated its rate-hiking campaign in March 2022 to curb inflation and cool down the economy. Since then, it has raised rates at all but one of its meetings. Rates remained unchanged during the June meeting, but the central bank increased rates again at its most recent meeting in July, reaching the highest level in over 22 years.
While investors await the Fed’s decision, several economic data points are still forthcoming. On Tuesday, preliminary building permits and housing starts data for August will be released, providing further insights into the state of the housing market.
Overall, investors will closely monitor the outcome of the Fed’s meeting and its future monetary policy decisions as they weigh the potential impact on Treasury yields and the broader financial markets.