On Wednesday, the yield on the 10-year Treasury rose by more than two basis points to 4.5639%, remaining above the level it surpassed on Tuesday. This increase came as investors evaluated the current state of the economy and reacted to a lackluster auction of five-year notes by the Treasury Department. The bid-to-cover ratio for this auction was below average, with weaker demand than expected.
Investors were also closely monitoring upcoming economic data releases that could impact Federal Reserve decision-making. The personal consumption expenditures price index, due on Friday, is a key inflation measure for the Fed. Additionally, several Fed officials were scheduled to speak during the week, providing insight into future interest rate policies.
Minneapolis Fed President Neel Kashkari noted on Tuesday that he would require more positive inflation data over the coming months before considering rate cuts. Fed officials have emphasized the need for patience and indicated that they are awaiting data showing sustained inflation at the 2% target before making changes to monetary policy. Minutes from the previous Fed meeting revealed uncertainty around the potential for rate cuts in the future.
