U.S. Treasury yields fell on Tuesday as investors assessed the outlook for interest rates and Federal Reserve monetary policy ahead of key inflation data due this week.
At 5:09 a.m. ET, the yield on the 10-year Treasury was down by more than 5 basis points to 4.026%. The 2-year Treasury was trading less than 1 basis point higher at 4.756%.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
Treasurys
Investors assessed the path ahead for Federal Reserve monetary policy, especially for interest rates, as they considered economic data and comments from central bank officials.
Philadelphia Fed President Patrick Harker signaled on Tuesday morning that the central bank could be at the end of its current rate-hiking cycle.
His remarks followed Fed Governor Michelle Bowman, who said Monday that she believes further rates hikes would be needed to bring inflation lower.
That comes after July's jobs report on Friday showed that the labor market may be cooling slightly, though it remains resilient.
The Fed began hiking interest rates to cool the economy and ease inflation in early 2022 and has announced rate hikes after all but one meeting since March that year. The central bank chose to keep rates unchanged in June 2023, but hiked them again the following month.
Three Fed policy meetings remain this year, and investors have been considering whether or not there will be further rate increases.
After the central bank's July meeting, Fed Chairman Jerome Powell indicated that rate decisions would be taken on a meeting-by-meeting basis and that economic data would play a key role.
Inflation data due later this week could therefore affect the Fed's next moves. July's consumer and produces price indexes are expected on Thursday and Friday, respectively.