Treasuries Move Back To The Downside Ahead Of Fed Announcement
(RTTNews) - After recovering from early weakness to end the previous session modestly higher, treasuries moved back to the downside during trading on Tuesday.
Bond prices came under pressure early in the session and remained firmly negative throughout the day. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, advanced 3.5 basis points to 4.996 percent.
The ten-year yield climbed as high as 5.016 percent during the day, marking its highest level since July 2007.
The weakness among treasuries came amid concerns about the outlook for inflation and interest rates ahead of the Federal Reserve's monetary policy decision on Wednesday.
The Fed is widely expected to raise interest rates, with CME Group's FedWatch Tool currently indicating a 94.5 percent chance of a quarter point rate hike.
"A 25bp Fed hike is now almost fully priced, meaning the bigger catalyst will be whether Kevin Warsh presents it as a one-off recalibration or signals that persistent inflation requires further tightening," said Daniela Hathorn, Senior Market Analyst at Capital.com
A sharp increase by the price of crude oil also weighed on treasuries, with U.S. crude oil futures spiking by more than 4 percent.
Supply concerns continue to drive the price of crude oil higher amid reports of fresh Houthi strikes on Saudi Arabia.
