U.S. Treasury yields held steady on Wednesday as investors keenly awaited the Federal Reserve’s interest rate decision as well as a batch of economic data.
At 4:19 a.m. ET, the 10-year Treasury yield was little changed at 4.33%. The 2-year yield was down less than a basis point to 3.87%, and the 30-year note was also lower by less than a basis point to yield 4.867%.
The Fed will make its interest rate announcement on Wednesday afternoon, and it’s widely expected to keep interest rates unchanged. Traders are pricing in a nearly 98% likelihood that the central bank will keep its key rate in a range of between 4.25% and 4.5%, according to CME Group’s FedWatch tool.
“In terms of near-term policy, our economists think Powell is unlikely to remove a September rate cut from consideration nor intentionally raise the probability of that outcome,” Deutsche Bank analysts said in a note.
“Even though political pressure on Powell to cut rates remains high, our view is that due to modestly stronger inflation prints over the coming months, the first cut should be in December, after which we expect a further 50bps reduction in Q1 2026.”
Fed Chair Jerome Powell will also give a speech at the press conference after the decision, which investors will monitor for hints about future monetary policy decisions, especially as President Donald Trump has tried to pressure the central bank leader to lower rates in recent months.
Investors will also monitor Fed Chair Jerome Powell’s speech at the press conference after the decision for hints about future monetary policy decisions.
On the economic data front, the ADP employment change, gross domestic product growth rate, and pending home sales are due in the morning.
