U.S. Treasury yields slipped on Wednesday as investors weighed mixed economic data and the Federal Reserve's December meeting minutes, which signaled that central bankers do not expect rate cuts this year.
The yield on the 10-year Treasury was down by more than 10 basis points at 3.692% at Wednesday's close, the lowest since December 2022. The 2-year Treasury yield fell by 5 basis points and was trading at 4.355%.
Yields and prices move in opposite directions and one basis point is equivalent to 0.01%.
Treasurys
Yields moved slightly higher after the Fed minutes were released and ticked down as traders digested the report. The minutes showed that central bank officials do not appear to be considering a policy pivot in 2023.
"Participants generally observed that a restrictive policy stance would need to be maintained until the incoming data provided confidence that inflation was on a sustained downward path to 2 percent, which was likely to take some time," the meeting summary stated.
The Fed implemented four consecutive 75 basis point rate hikes, followed by a 50 basis point increase at its December meeting, throughout 2022. Concerns about this pace dragging the U.S. economy into a recession have spread among investors in recent months.
Traders pored through a slew of fresh economic data Wednesday, including manufacturing numbers that showed another contraction for the sector. The ISM manufacturing index came in at 48.4 for December, down from 49 in November.
"Demand eased, with the (1) New Orders Index remaining in contraction territory, (2) New Export Orders Index markedly below 50 percent, (3) Customers' Inventories Index in 'just right' territory, and (4) Backlog of Orders Index recovering slightly but still in strong contraction," said Timothy Fiore, chair of the Institute for Supply Management.
Meanwhile, the Job Openings and Labor Turnover Survey for November showed available positions at 10.46 million, slightly above a FactSet estimate of 10 million.