U.S. Treasury yields were slightly higher Wednesday, as investors awaited the release of the minutes from the Federal Reserve’s meeting earlier this month.
The yield on the benchmark 10-year Treasury note added less than 1 basis points to 2.763%. The yield on the 30-year Treasury bond rose 1 basis point to 2.987%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
Treasurys
The Fed minutes are slated for release at 2 p.m. ET. At the May 4 meeting, the Fed hiked rates by half a percentage point, with Chair Jerome Powell saying that inflation is “much too high and we understand the hardship it is causing. We’re moving expeditiously to bring it back down.”
More aggressive tightening of monetary policy by the Fed has raised concerns that this could contribute to a slowdown in economic growth.
Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, said in a note on Wednesday that while a recession in the U.S. was not his firm’s base case, “the risks do appear to be higher than the Fed is admitting.”
Ahmed said his team expected the Fed to deliver less tightening in 2022 than both it and markets currently anticipate.
“Monitoring how much recession risk is really there, and whether the Fed is evaluating that correctly, will be key to a number of asset allocation decisions in the coming months,” he said.
The 10-year rate dropped 10 basis points in the previous session, as investors sought shelter in government bonds during a sell-off in stock markets.
The tech-heavy Nasdaq Composite index fell 2.4% in the previous session, after social media company Snap warned of slowing growth. Mixed economic data also appeared to weigh on investor sentiment.
