The yield on the 10-year Treasury note was little changed Wednesday as investors absorbed another consecutive big rate hike from the Federal Reserve. They also digested comments that the central bank could slow the pace of rate increases at some point.
The yield on the benchmark 10-year Treasury note was little changed at 2.78% while the yield on the 30-year Treasury bond was at 3.066%. Yields move inversely to prices and a basis point is equal to 0.01%.
The second 0.75 percentage point rate hike from the Federal Reserve was broadly in line with what economists were expecting, as the central bank attempts to curb inflation while navigating a backdrop of slowing growth.
Bond yields fell earlier in the session as Powell left the door open about the size of the rate move at its next meeting in September and noted the central bank would eventually slow the magnitude of rate hikes. The Fed chair said the central bank could hike by 75 basis points again in September, but that it would be dependent on the data.
"As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation," Powell said.
In addition, the Fed chair said he does not believe the U.S. economy is in a recession, given a "very strong labor market."
"I do not think the U.S. is currently in a recession," Powell said. "And the reason is there are too many areas of the economy that are performing too well."
Investors are expecting the second-quarter gross domestic product reading on Thursday, with many expecting the economy to have barely expanded after first quarter GDP declined by 1.6%. Many investors believe two consecutive quarters of negative GDP indicates a recession. However, the National Bureau of Economic Research uses multiple factors to determine an official recession.
"With rates now close to the Fed's estimate of neutral, the economy clearly showing signs of a slowdown in the face of rising rates and inflation set to fall in July, we suspect the Fed will shift back to smaller hikes from here, with a 50bp hike in September the most likely option," said Michael Pearce, senior U.S. economist at Capital Economics.
Elsewhere, in corporate earnings, shares of Boeing gained slightly Wednesday, even after disappointing on earnings and revenue, because of weakness in its defense unit.
Shopify jumped on the back of a rally in tech stocks despite reporting an earnings miss. The e-commerce company said it expects losses will increase in the current quarter, citing inflation and rising interest rates.
Qualcomm, Ford and Meta Platforms will report at the end of the day.
— CNBC's Holly Ellyatt, Tanaya Macheel and Sarah Min contributed to this report.