U.S. Treasury yields were little changed on Wednesday as investors digested a slew of economic data.
The yield on the benchmark 10-year Treasury note was mostly flat around 1.662% at 10:40 a.m. The benchmark yield peaked above 1.68% earlier in the session. The yield on the 30-year Treasury bond was down nearly 3 basis points, falling just below the 2% level. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Yields have jumped sharply this week, as the 10-year Treasury yield was trading near 1.54% on Friday.
U.S. jobless claims tumbled to 199,000 last week, hitting their lowest level in more than 52 years, the Labor Department reported Wednesday. The report easily beat Dow Jones estimates of 260,000. Personal income and consumer spending both rose more than expected.
The third-quarter GDP was revised up slightly to 2.1%, though it missed an estimate of 2.2%.
However, other data points on Wednesday weren’t as solid. Census Bureau said durable goods orders showed an unexpected decline in October. Core PCE, the Fed’s preferred measure of inflation, was up 4.1% year over year in October, matching estimates.
The Fed is due to release the minutes from its November meeting at 2 p.m. ET. In the latest meeting, the central bank confirmed its plans to start tapering its $120 billion monthly bond-buying program, so investors will be poring over the minutes for further details.
Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC’s “Squawk Box Europe” on Wednesday that investors would have to watch the Fed’s communications “very carefully.”
Ahmed said that the Fed was experiencing a “communication dilemma.”
Ahmed explained that the Fed had tried to tell investors that the “tapering decision has nothing to do with rate hikes.” However, he said that it was now becoming more difficult to maintain this argument with the continued rise in inflation, which “may not go back to those low levels that we had been used to.”
October’s personal consumption expenditure index, which is the Fed’s preferred inflation measure, is set to come out at 10 a.m. ET.
Auctions are slated to be held on Wednesday for $10 billion of four-week bills, $25 billion of eight-week bills, $40 billion of 119-day bills and $60 billion of 14-day bills.
