U.S. Treasury yields were mostly lower on Tuesday as investors considered the outlook for Federal Reserve monetary policy following the latest economic data and remarks from central bank officials.
The yield on the 10-year Treasury was down more than 3 basis points at 4.457%. The 2-year Treasury yield was up by less than 1 basis point at 4.828%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors have been on edge recently over when — and how many times — the Fed will cut interest rates.
Minneapolis Fed Reserve President Neel Kashkari on Tuesday said he expects the central bank to stay put on interest rates for an extended period of time until it gets further clarity on disinflation, and did not rule out the possibility of another rate hike.
On Monday, Richmond Federal Reserve President Tom Barkin indicated that the central bank had time to wait until policymakers were more confident about inflation easing before cutting rates. This was in line with guidance provided by the Fed after its latest meeting earlier this month.
Barkin’s comments came after a weaker-than-expected April jobs report released at the end of last week had buoyed hopes about rate cuts. The report showed that nonfarm payrolls increased by 175,000 in the month, far fewer than the previous estimate of 240,000, and the unemployment rate rose from 3.8% to 3.9%.
More Fed policymakers are slated to make remarks throughout the week, which investors will be watching closely for additional hints about the policy outlook. On the data front, consumer sentiment insights are due at the end of the week.
