Long-term Treasury yields dip again as investors wait for Fed's next move
U.S. Treasury yields moved lower on Tuesday, extending Monday's declines for long-dated government debt.
The yield on the benchmark 10-year Treasury note dipped 2.3 basis points to 1.612% in afternoon trading. The yield on the 30-year Treasury bond fell 4.5 basis points to 2.04%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Treasurys
| TICKER | COMPANY | YIELD | CHANGE |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.382% | +0.017 |
| US3M | U.S. 3 Month Treasury | 5.395% | +0.008 |
| US6M | U.S. 6 Month Treasury | 5.385% | UNCH |
| US1Y | U.S. 1 Year Treasury | 5.192% | +0.01 |
| US2Y | U.S. 2 Year Treasury | 4.855% | -0.002 |
| US10Y | U.S. 10 Year Treasury | 4.487% | +0.006 |
| US30Y | U.S. 30 Year Treasury | 4.631% | +0.009 |
The 10-year rate traded as high as 1.673% earlier during Monday's session but fell back to hover above 1.63%. U.S. stock markets closed the previous session at record highs, amid strong company earnings reports. However, concerns about a combination of rising inflation and slowing economic growth, also known as "stagflation," continue to plague investor sentiment.
The moves in yields come as investors prepare for the next move from the Federal Reserve, which is widely expected to begin slowing its asset purchases later this year. The central bankers are scheduled to meet next week to discuss policy changes.
Even though yields have retreated in recent days, the 10-year is still trading well above its recent lows near 1.1% in early August.
"I think that, simply, we're going to see a continuation of the long-end creeping up. And the short end is just basically going to trade based off of what the market expects for next year as far as rate hikes go," said John Luke Tyner, a fixed income analyst and portfolio manager at Aptus Capital Advisors.
The pace of new home sales in the U.S. in September came in at a seasonally adjusted annual rate of 800,000, up from a downwardly revised pace of 702,000 in August, the Census Bureau said Tuesday. Economists polled by Dow Jones were expecting a pace of 760,000 in September.
"The bottom line remains the same with housing that is combining little inventory and cheap money which in turn is resulting in aggressive home price increases that has caused a plateau in the pace of transactions particularly from that first time buyer," Peter Boockvar of Bleakley Advisory Group said in a note to clients.
The October CB consumer confidence index also came in higher than expected on Tuesday.
Auctions were held on Tuesday for $40 billion of 48-day bills and $60 billion of two-year notes.
— CNBC's Maggie Fitzgerald contributed to this market report.