U.S. Treasury Yields Rise Amid Fed Policy Anticipation and Employment Data
Quick Look
- Treasury yields increased as investors awaited further data and clues on the Federal Reserve's monetary policy.
- Newly appointed Fed Chair Kevin Warsh is scheduled to speak, while markets price in probabilities for upcoming Fed meetings and new employment data shows private payrolls rising less than expected.
AI-generated summary
Why It Matters
U.S. Treasury yields increased as investors awaited further data and clues on the Federal Reserve's monetary policy path, with the 10-year Treasury note yield rising to 4.469%. Markets are also reacting to new employment data, which showed private payrolls rising less than expected.
U.S. Treasury yields rose on Wednesday, as investors awaited more data and clues on the Federal Reserve's monetary policy path.
The yield on the benchmark 10-year Treasury note — the main benchmark for mortgages, auto loans and credit card debt — was 4 basis points higher at 4.469% at 8:26 a.m. ET.
The shorter-term 2-year note added 4.8 basis points to trade at around 4.187%, while the yield on the 30-year Treasury was up by 8 basis points at 4.983%.
Newly appointed Fed Chair Kevin Warsh is set to give a speech at the European Central Bank's annual policy forum in Sintra, Portugal, on Wednesday. Investors will be monitoring the talk for clues on what lies ahead for the Fed's monetary policy agenda.
At 9 a.m. ET, Warsh will also join a panel at the conference with CNBC's Sara Eisen, alongside the governors of the Bank of England, European Central Bank, and the Bank of Canada.
Markets are currently pricing in a 66.3% chance of the Fed keeping rates steady at its July meeting, and a 66.9% chance that it enacts at least a quarter-point hike at the subsequent FOMC meeting in September, according to the CME's FedWatch tool.
Traders also weighed new employment data, with private payrolls rising by 98,000 in June — less than a Dow Jones consensus of 110,000. The numbers come ahead of the government's monthly jobs report due Thursday morning.
What to Watch
AI outlook — possibilities, not facts
The Federal Reserve will keep rates steady at its July meeting.
Likely · Within weeks
The Federal Reserve will enact at least a quarter-point hike at the September FOMC meeting.
Likely · Within months
Open Questions
- What specific clues will Warsh provide on Fed policy?
- How will the government's monthly jobs report impact markets?
- Will the Fed enact a quarter-point hike in September?
