U.S. Treasury yields held steady on Wednesday as investors considered new commentary from Federal Reserve officials suggesting that the central bank would proceed with caution before cutting rates.
The yield on the 10-year Treasury added 2 basis points to 4.11%, while the 2-year Treasury yield edged up 2 basis points to 4.431%.
Yields and prices move in opposite directions. One basis point equals 0.1%.
Treasurys
Investors weighed new remarks from a host of Fed speakers that urged further caution on rate cuts. Fed Governor Adriana Kugler said that while inflation is easing the "job is not done yet," while Minneapolis Fed President Neel Kashkari said he expects only two to three cuts.
Uncertainty about the outlook for monetary policy has been widespread, prompting investors to reassess the potential timetable for interest rate cuts.
That comes as comments from Fed Chair Jerome Powell suggested that rate cuts may not take place until later than many investors had been expecting, and that the central bank would tread carefully. His remarks also signaled that there may be fewer cuts than expected, fueling concerns about the impact of elevated rates on the economy and if they could lead to a recession in the U.S.
Recent data and the latest raft of earnings results, however, have signaled ongoing resilience in the economy despite elevated rates.
"You have to start seeing the needle move a little bit," said Ken Mahoney of Mahoney Asset Management. "We haven't really seen anything that glowingly sticks out that's weakening and that's [what] we all should be looking for."
As of Monday, traders are pricing in a 18.5% chance of rate cut in March, according to CME Group's FedWatch tool. The expectation had been above 80% about two weeks ago.