U.S. Treasury yields were slightly higher on Wednesday as investors awaited the Federal Reserve’s interest rate decision and welcomed upcoming trade discussions between the U.S. and China.
At 4:28 a.m. ET, the 10-year Treasury yield was just over one basis point higher to 4.335%, and the 2-year Treasury yield was up over 3 basis points at 3.826%.
One basis point is equal to 0.01% and yields and prices move in opposite directions.
Investors are anticipating the Fed’s monetary policy decision on Wednesday, which will be announced at 2 p.m. ET. There are concerns that U.S. President Donald Trump’s tariff plans could elevate inflation, complicating the path for interest rate decisions.
However, traders are pricing in a 95.6% chance that the central bank will hold borrowing rates steady, according to the CME Group FedWatch Tool.
The Fed’s meeting comes after Trump repeatedly criticized Fed Chairman Jerome Powell and pressured the central bank leader to lower rates, even threatening to fire him. Trump later walked back those comments, saying he had “no intention” of firing Powell.
Investors will also monitor Powell’s speech after the decision for insights into future interest rate decisions and for clues about the state of the U.S. economy.
There are also hopes that the U.S. and China will strike a trade deal after government spokespeople said U.S. Treasury Secretary Scott Bessent and top trade official Jamieson Greer would meet with their Chinese counterparts this week in Switzerland. There’s optimism that trade negotiations are underway after Trump announced sweeping “reciprocal” tariffs in April.
