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Treasurys flat as investors digest comments from Fed's Powell

Bond traders at CME Group
Getty Images

U.S. government debt prices were mostly flat on Tuesday as investors digested the latest release of U.S. economic data and comments from Federal Reserve Governor Jerome Powell.

The case for a rate hike has clearly strengthened since the central bank's last meeting, Powell said in prepared remarks at an event in Washington, D.C.

While Powell said he thinks that the Fed's patience in raising rates has paid dividends, he warned that moving too slowly could eventually mean that the Federal Open Market Committee would have to abruptly tighten policy to avoid overshooting its goals.

The yield on the benchmark 10-year Treasury notes, which moves inversely to price, was roughly flat near 2.306 percent, while the yield on the 30-year Treasury bond was slightly lower at 2.951 percent.

Symbol
Yield
 
Change
%Change
US 3-MO
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US 1-YR
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US 2-YR
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US 5-YR
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US 10-YR
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US 30-YR
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Revised third-quarter gross domestic product (GDP) data showed the U.S. economy grew at an annualized rate of 3.2 percent. Other data released Tuesday included the S&P Core Logic Case-Shiller index, which showed U.S. home prices gained 5.5 percent in September. The Consumer confidence index for November came in at 107.1, well above expectations.

Economic data has been at the forefront for investors as they brace themselves for a possible interest rate hike from the Federal Reserve next month. According to the CME Group's FedWatch tool, market expectations for a December rate hike are above 95 percent.

In oil markets, U.S. crude settled down 3.9 percent at $45.23 a barrel.

Oil prices slipped on Tuesday after investors viewed the leading oil exporters to be struggling to agree a deal to cut production in an attempt to reduce global supply, according to a Reuters report.

OPEC is set to meet in Vienna, Austria on Wednesday and traders will be keeping a close eye on announcements regarding an oil production cut. In September, OPEC had outlined a deal to cut output by approximately 1 million barrels per day.