- U.S. Treasury yields decline as investors anticipate crucial economic data and the Federal Reserve's interest rate decision.
- The 10-year Treasury yield is down by 9.4 basis points to 4.066%, while the 2-year Treasury yield retreats 5.5 basis points to 4.31%.
- Investors eagerly await the Fed's interest rate decision and closely monitor key economic data scheduled for the week.
Treasury yields experienced a decline on Monday as investors turned their attention to a week filled with significant economic data releases and the Federal Reserve's first interest rate decision of the year.
The yield on the 10-year Treasury decreased by 9.4 basis points, settling at 4.066%, while the 2-year Treasury yield pulled back 5.5 basis points, reaching 4.31%.
Yields and prices, as always, move in opposite directions, and it's a pivotal week for investors as they await the Federal Reserve's interest rate decision and key economic data releases.
Investors are particularly focused on the upcoming Fed interest rate decision scheduled for Wednesday. They are also keeping a close eye on essential economic data expected this week.
This follows the release of December's personal consumption expenditures price index, a critical inflation gauge for the Fed. Published on Friday, it showed a 0.2% increase from the previous month and a 2.9% rise on an annual basis. Economists, surveyed by Dow Jones, had anticipated increases of 0.2% and 3%, respectively.
The Fed's January meeting is set to begin on Tuesday, leading up to the central bank's interest rate decision on Wednesday.
Investors widely expect the Fed to maintain unchanged rates and are eager for fresh guidance on the outlook for interest rates, particularly the potential for rate cuts. According to CME Group's FedWatch tool, markets are currently pricing in an almost 50% chance of rates being cut at the Fed's March meeting.
Key data from the labor market that could provide insights into the state of the economy and the impact of interest rates is also on the agenda this week. The latest JOLTs job openings figures are slated for Tuesday, followed by ADP's private payrolls report on Wednesday and the January jobs report — encompassing nonfarm payrolls and unemployment figures — on Friday.
