U.S. Treasury yields fell on Wednesday as traders sorted through recent readings on the labor market to gauge the possibility of a recession in the months ahead.
The yield on the benchmark 10-year Treasury note slipped about 3 basis points to 3.309%, while the yield on the 2-year note fell more than 3 basis points to 3.798%. Yields move inversely to prices.
Yields were higher before the ADP private payrolls report came in below expectations, signaling a slowdown in hiring in March.
That report comes after job openings data released Tuesday showed vacancies fell below 10 million in February for the first time in nearly two years, pressuring Treasury yields as investors considered whether the information could deter the Fed from further rate hikes.
The ISM Services index also showed slower-than-expected growth in March, according to a report Wednesday, adding to the market's recession worries.
Future monetary policy moves remain in focus, with the Federal Reserve continuing to tackle inflation and the aftermath of banking collapses that caused turmoil in the bond markets in recent weeks.
The Fed is next scheduled to meet in early May, and the market is split on whether the central bank will pause or hike rates by a further 25 basis points, according to the CME Group's FedWatch tool.
Federal Reserve Bank of Cleveland President Loretta Mester said in a speech in New York on Tuesday that the central bank needed to raise rates to address inflation.
"Precisely how much higher the federal funds rate will need to go from here and for how long policy will need to remain restrictive will depend on how much inflation, and inflation expectations are moving down," Mester said, adding that it will "depend on how much demand is slowing, supply challenges are being resolved, and price pressures are easing."
Mester also told Bloomberg News on Wednesday that rates would need to go "a little bit higher" with the Fed then maintaining that level until inflation declined.
Overseas, New Zealand's central bank hiked rates by 50 basis points.