U.S. Treasury yields were little changed on Tuesday as investors considered the path ahead for inflation and interest rates following a series of remarks from Federal Reserve speakers.
At 8:31 a.m. ET, the yield on the 10-year Treasury was down by less than 1 basis point to 4.432%. The 2-year Treasury yield was last at 4.835% after slipping by less than one basis point.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors assessed the state of the economy, especially regarding inflation, and how this may affect interest rates.
Federal Reserve speakers on Monday reiterated caution about inflation and whether it is headed back toward the central bank’s 2% target range.
“It is too early to tell whether the recent slowdown in the disinflationary process will be long lasting,” Fed Vice Chair Philip Jefferson said, while Fed Vice Chair of Supervision Michael Barr said recent inflation data had not given him the confidence he was looking for about inflation easing.
Earlier this month, the consumer price index for April reflected price increases of 0.3% on a monthly basis and 3.4% from a year ago. The monthly figure was just below estimates, while the annual reading was in line with expectations.
“We will need to allow our restrictive policy some further time to continue its work,” Barr said.
This comes as uncertainty about when the Fed may start cutting rates has lingered among investors. They are hoping to gain fresh insights into the thinking of policymakers this week, with various Fed officials slated to give remarks and minutes from the Fed’s last meeting set to be published.
On the data front, existing as well as new home sales figures and durable goods orders data are due this week.
