The benchmark 10-year Treasury note yield traded along the flatline Wednesday, with minutes from the Federal Reserve’s December policy meeting due out later in the day.
The 10-year hovered around 1.65%. The 30-year bond yield dipped slightly to trade at 2.062%. The 2-year rate, meanwhile, ticked higher by 1 basis point to around 0.78%. Yields move inversely to prices and 1 basis point equals 0.01%.
Yields rose at their fastest new year pace in 20 years to start 2022. The 10-year yield hit 1.71% on Tuesday, having ended 2021 at 1.51% on Friday afternoon.
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.
On the data front, data compiled by ADP showed U.S. private payrolls grew by 807,000 in December. That’s more than double the Dow Jones estimate of 375,000. To be sure, the survey covers through the middle of December, before the worst of omicron Covid-19 spread.
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.
— CNBC’s Patti Domm contributed to this market report.
