Traders work on the floor of the New York Stock Exchange during the opening bell on Nov. 13, 2024.
The 10-year U.S. Treasury yield advanced on Tuesday as investors looked ahead to the latest Federal Reserve meeting minutes and key economic data due this week.
The yield on the 10-year Treasury rose more than 5 basis points to 4.316%, regaining some ground after tumbling in Monday's session. The 2-year Treasury yield was more than 3 basis points higher, at 4.289%.
Yields and prices moved inversely to one another, and one basis point equals 0.01%.
Investors considered the state of the economy and looked ahead to the release later Tuesday of the minutes from the Federal Reserve's last policy meeting earlier this month, when it lowered its benchmark lending rate a quarter point to a range of 4.50% to 4.75%.
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Investors will closely scan the minutes for any hints about the future direction of interest rates. The central bank started cutting the fed funds rate in September, and the next meeting of the rate-setting Open Market Committee comes on Dec. 17-18.
Current expectations are for no more than a coin flip at the Fed's last meeting of the year, based on the CME Group's FedWatch Tool, which extrapolates what the market is forecasting based based on 30-day interest rate futures prices. Traders are pricing in about a 53% chance the Fed shaves rates another quarter point next month, and 47% odds rates will stay unchanged.
The minutes come one day ahead of key inflation data, when the personal consumption expenditures price index for October is released Wednesday. The PCE is the Fed's favored inflation gauge and inform its monetary policy decisions.
Money Report
On Tuesday, October new home sales came in far below Wall Street expectations, November consumer confidence was a touch weaker than estimated and the Richmond Fed's manufacturing index missed economists' estimates.
Investors also continued to assess President-elect Donald Trump's choice of hedge fund executive Scott Bessent as Treasury secretary. The pick soothed investor nervousness and reassured capital markets that economic policy will stay in competent hands, with Bessent expected to prioritize economic and market stability over ideology.
