Treasury yields fall as investors consider next Fed rate move

Treasury yields dropped Thursday as investors digested comments from Federal Reserve Chairman Jerome Powell about interest rate policy and assessed the state of the economy.

The 10-year Treasury yield was last down about 7 basis points at 3.909%. The 2-year Treasury yield fell 19 basis points to 4.874%, after topping the key 5% level earlier this week.

Yields and prices move in opposite directions. One basis point equals 0.01%.


After Fed Chairman Powell hinted that interest rates could reach higher-than-anticipated levels and the pace of rate hike could pick up again in remarks made before Congress this week, investors considered the central bank's policy plans.

Many are now expecting the Fed to announce a 50 basis point rate hike at the conclusion of its next meeting on March 21 and 22. At its latest meeting, the central bank increased rates by 25 basis points.

Fears about the pace of rate hikes dragging the U.S. economy into a recession have persisted, with investors closely tracking economic data reports to assess their impact. The Fed has been hiking rates in an effort to cool the economy, including the labor market, and ease inflation.

Investors on Thursday parsed through a mixed bag of jobs data. On Wednesday, ADP's employment report for February came in higher than expected, while January's JOLTS reading showed that while job openings dipped, they still exceeded available workers. Jobless claims data on Thursday, however, suggested the labor market may be beginning to slow.

Attention also shifted toward February's non-farm payroll report and unemployment figures expected Friday.