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Treasury yields fall as Fed Beige Book shows a tight labor market and a growing economy

Key Points
  • Investors are tracking corporate earnings, which have been a mixed bag.
  • Market players are also keeping an eye on the Federal Reserve, which has been taking a more dovish approach recently.

U.S. government debt prices rose on Wednesday as the Federal Reserve said the economic activity grew at a slight-to-moderate pace in March and early April.

The yield on the benchmark 10-year Treasury note fell 0.14% about 2.5890%, while the yield on the 2-year Treasury bond fell 0.34% to 2.3981%. Bond yields move inversely to prices.

U.S. Markets Overview: Treasurys chart

The Fed's Beige Book report, a region-by-region assessment of the U.S. economy based on anecdotal information collected by the 12 regional Fed banks, found that the U.S. economy continues to grow and labor markets remains tight across the country.

Investors are tracking corporate earnings, which have been a mixed bag. IBM reported better-than-expected earnings, but its revenue fell for a third straight quarter. Netflix shares also suffer as its guidance for second-quarter earnings disappointed investors.

Morgan Stanley posted stronger-than-expected numbers boosted by sales in its wealth management and fixed income trading divisions.

The U.S. goods and services deficit fell to $49.4 billion in February to its lowest level since June 2018, the Commerce Department reported Wednesday. The number was well below estimates.

Market players are also keeping an eye on the Federal Reserve, which has been taking a more dovish approach recently. Speaking to CNBC on Monday, Chicago Federal Reserve President Charles Evans said that he'd be comfortable leaving interest rates untouched until autumn 2020.

Philadelphia Fed President Patrick Harker will speak at 12.30 p.m. ET as well as St. Louis Fed President James Bullard.

There are no Treasury auctions planned.