U.S. Treasury yields fell on Wednesday morning, with minutes from the Federal Reserve’s December policy meeting due out later in the day.
The yield on the benchmark 10-year Treasury note moved 2 basis points lower to 1.6438% at 4:15 a.m. ET. The yield on the 30-year Treasury bond dropped 3 basis points to 2.047%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Yields rose at their fastest new year pace in 20 years during the bond market’s first day of trading on Tuesday. The 10-year yield hit 1.71% on Tuesday, having ended 2021 at 1.51% on Friday afternoon.
Treasurys
Investors will be poring over the minutes from the Fed’s December meeting, which are due to be released at 2 p.m. on Wednesday.
The Fed announced following the meeting that it would be speeding up the reduction of its monthly bond purchases. Fed officials also indicated that they foresaw as many as three interest hikes coming in 2022.
Chris Watling, CEO and chief market strategist at Longview Economics, told CNBC’s “Squawk Box Europe” on Wednesday that his firm believed that markets had already priced in many of the interest rate hikes expected over the next few years, partly because of concerns around inflation.
“We think inflation will come off and the economy will remain strong, and actually, that’ll take a little bit of pressure off the Fed to get going quite as quickly as the market wants it to,” Watling said.
Meanwhile, payroll services firm ADP is set to release its December employment change report at 8:15 a.m. ET.
Jobs data is one indicator being used by the Fed to help determine its timeline on tightening monetary policy.
November’s Job Openings and Labor Turnover Survey, published Tuesday, showed a record 4.53 million U.S. workers quit their jobs that month.
Markit’s final purchasing managers’ index readings for December are scheduled to be released at 9:45 a.m. ET on Wednesday.
An auction is slated to be held for $40 billion of 119-day bills on Wednesday.
— CNBC’s Patti Domm contributed to this market report.