U.S. Treasury yields dipped on Wednesday as investors looked to key economic data ahead that could provide hints about the outlook for interest rates.
At 4:26 a.m. ET, the yield on the 10-year Treasury yield was down by over one basis point to 4.3013%. The 2-year Treasury yield was last more than one basis point lower to 4.6933%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors considered what could be ahead for monetary policy, especially interest rates, as they awaited key economic data.
The personal consumption expenditures price index is due Thursday and investors are hoping it will signal that inflation is easing. The PCE is a key inflation gauge for the Federal Reserve and policymakers have said they are looking for more evidence that pressures from elevated prices cooling before making decisions around interest rate cuts.
January’s consumer and producer price indexes both came in above expectations, prompting investors to push back expectations for when the first interest rate cut will take place. The first rate cut was last priced in for June, several months later than the March date investors had still been hoping for in early January.
Investors have been hoping that rate cuts will start sooner rather than later as fears about the impact of elevated rates on the economy, particularly whether they could lead to a recession, have continued.
Data released on Tuesday suggested that consumer confidence is declining as concerns about the labor market cooling and an unstable political landscape take hold. Meanwhile, the latest durable goods orders report reflected a 6.1% decline, which was more than expected.
