U.S. Treasury yields were lower on Wednesday, regaining some ground after facing heavy selling pressure in the previous session amid investor concerns over inflation, government debt and the possibility of tighter monetary policy.
THE 30-year Treasury bond was last down nearly 2 basis points at 5.578%, after hitting its highest level since 2002 on Wednesday. Cash flow at 10 years was down about 1 basis point at 5.243% and the Cash flow over 2 years the note yield remained stable at 4.889%.
One basis point is 0.01%, and yields and prices move in opposite directions.
Recent yield pressures reflect the potential for future interest rate decisions by the Federal Reserve, as high oil prices driven by conflict in the Middle East drive inflation expectations higher.
Traders now give a 45% chance of another Fed rate hike at its next meeting in October, according to the CME FedWatch tool.
New York Federal Reserve President John Williams said late Tuesday that there was “no need for urgency and we have time to gather more information” before the Fed’s October meeting.
Investors await the Federal Reserve’s preferred inflation gauge on Wednesday, with the reading of the Personal Consumption Expenditures Price Index. Economists surveyed by Dow Jones expect a monthly increase of 0.3% and an annual increase of 3.7%.
The report will follow new data on private payrolls that turned out to be stronger than expected. Payrolls increased by 90,000 in September, according to ADP data, surpassing the Dow Jones estimate of 68,000.
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