U.S. Treasury yields ticked higher Wednesday as all eyes were on the Federal Reserve’s interest rate decision expected for later in the day.
At 9:12 a.m. ET, the yield on the 10-year Treasury was up by around 3 basis points at 3.674%. The 2-year Treasury yield was last at 3.623% after adding nearly three basis points.
Yields and prices move in opposite directions. One basis point equals 0.01%.
The focus on Wednesday will be on the Federal Reserve’s latest interest rate decision and guidance for the monetary policy outlook. While a interest rate cut is all but guaranteed, traders are divided about the size of the rate reduction.
A 25-basis-point cut was widely expected until recent days when investors began pricing in a higher probability of a bigger 50-basis-point reduction. Chances of that last stood at 61%, CME Group’s FedWatch tool showed.
Investors are also hoping for hints about what Fed interest rate policy could look like for the remainder of the year and if more cuts are on the horizon. Fed Chairman Jerome Powell is set to give a post-meeting press conference that could provide fresh insights into the central bank’s thinking.
The Fed’s latest economic projections are also due to be released Wednesday.
Data published Tuesday showed that retail sales were better than expected in August, rising 0.1%. A 0.2% decline was forecast by economists surveyed by Dow Jones.
Also on Wednesday, preliminary building permit and housing starts data for August is due, which will be followed by existing home sales figures on Thursday.
