On Wednesday, U.S. Treasury yields increased as investors took into account the latest economic data and assessed the state of the economy. The 10-year Treasury yield rose by more than two basis points to 4.6273%, while the 2-year Treasury yield increased by over three basis points to 4.9414%. Yields and prices move in opposite directions, with one basis point equaling 0.01%.
Investors continued to analyze economic data amid uncertainty surrounding the state of the economy and its potential impact on Federal Reserve monetary policy decisions. The S&P Global Flash manufacturing PMI for the U.S. released on Tuesday showed a four-month low of 49.9 for April, indicating a contraction in the sector. This data led investors to believe that the economy might be experiencing a slight slowdown.
Although there have been signs of resilience in the economy in the face of high interest rates and inflation, recent economic data has raised questions about the number of anticipated rate cuts by the Fed this year. Expectations for rate cuts have shifted, and some investors are wondering if there may be fewer cuts than previously predicted.
Throughout the rest of the week, more economic data is expected, including durable goods orders on Wednesday, a first-quarter Gross Domestic Product reading on Thursday, and the Personal Consumption Expenditures Price Index on Friday. Investors are eagerly awaiting the Fed’s next meeting on April 30 to May 1, where rates are likely to remain unchanged. However, investors will be closely monitoring any hints from the Fed regarding future monetary policy decisions, as officials have expressed caution about setting a specific timeline for potential rate cuts.