U.S. Treasury yields were little changed on Tuesday as investors keenly awaited the Federal Reserve’s first interest rate policy meeting since President Donald Trump’s “reciprocal” tariffs went into effect in April.
At 4:11 a.m. ET, the 10-year Treasury yield rose nearly 2 basis points to 4.363%. The 2-year Treasury yield was down over 2 basis points to 3.818%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Investors are anticipating the start of the Fed’s policy meeting which will take place on Tuesday and Wednesday, with Trump applying pressure on central bank leader Jerome Powell to cut rates in recent weeks.
However, traders are pricing in just a 4.4% chance of the central bank cutting rates, according to the CME FedWatch Tool.
“We expect the Fed to keep rates steady and avoid explicit forward guidance about the policy path ahead,” analysts at Deutsche Bank said in a note. “The overall tone of the meeting is likely to echo comments from Chair Powell and his colleagues in recent weeks.”
“In particular, the administration’s policies are likely to push the economy away from the Fed’s dual mandate objectives for a period of time but that monetary policy is ‘well positioned’ to respond to the evolving outlook.”
Investors are also hopeful about the U.S. striking trade deals with international partners, as Treasury Secretary Scott Bessent confirmed Monday that “we’re very close to some deals,” echoing Trump’s remarks from Sunday that some agreements would be reached as early as this week.
On the economic data front, insights on the U.S. trade deficit for March will be released on Tuesday morning.
