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TREASURIES-Benchmark 10-year notes steady before Fed meeting

Karen Brettell

* Fed meeting statement, press conference in focus

* Treasury to sell $84 bln coupon-bearing supply next week

* Employers added 275,000 jobs in April -ADP

NEW YORK, May 1 (Reuters) - Benchmark 10-year notes were steady on Wednesday as investors awaited the conclusion of the Federal Reserves two-day policy meeting for further indications of future interest rates. The Fed will issue a statement and Fed Chairman Jerome Powell will give a news conference. Investors will look for whether the U.S. central bank notes softening inflation, or comments on market pricing on the path of future rate moves. If theres an acknowledgement about some of the weaker inflation data that weve seen recently, particularly core PCE, that would be a dovish outcome, said Jon Hill, an interest rate strategist at BMO Capital Markets in New York. Interest rate futures traders are currently pricing in a 64 percent chance of an interest rate cut by December, according to the CME Group's FedWatch Tool. The Feds sudden pivot toward a dovish stance in March stunned the market and prompted a rapid repricing for the possibility of future rate cuts, instead of hikes. Another focus will be whether the U.S. central bank cuts the interest it pays on excess reserves (IOER) in a bid to prevent the federal funds rate from drifting higher, as some analysts expect. The Treasury said on Wednesday that the U.S. government will have to stop borrowing money between July and December if Washington does not agree to raise the debt ceiling.

It also said it plans to sell $84 billion in coupon-bearing supply next week, including $38 billion in three-year notes, $27 billion in 10-year notes and $19 billion in 30-year bonds. Jobs data for April released on Friday will be closely watched for further indications of wage pressures and the strength of the labor market. U.S. private employers added 275,000 jobs in April, well above economists' expectations and the most since last July, the ADP National Employment Report showed on Wednesday.

(Editing by David Gregorio)

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