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NEW YORK — Benchmark US Treasury yields edged lower on Wednesday after minutes released from the Federal Reserve’s last meeting showed agreement that the case for further interest-rate tightening had become “less certain.”
The yield on 10-year Treasury notes was up 0.9 basis points at 3.707%.
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Recent comments from Federal Reserve officials have fueled some uncertainty about whether the central bank will pause its rate-hiking cycle at its mid-June meeting, indicating officials are not in unison about the path of monetary policy.
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Expectations for another 25-basis-point hike from the Fed at the June meeting have edged up recently and are currently at 34%, up from 28.1% on Tuesday, according to CME’s
FedWatch Tool
.
The yield on the 30-year Treasury bond was
up 0.3 basis point
to
3.955
%.
The yield on one-month bills hit another record high of 5.892%, as concerns about payments coming due when the Treasury is most vulnerable to running out of money keeps investors away. The yield was last at 5.724%.
The Treasury auctioned $43 billion in 5-year notes on Wednesday and saw decent demand, with a bid-to-cover ratio of 2.58 and a high yield of 3.749%. Treasury saw strong demand for a $42 billion sale of two-year notes on Tuesday, which sold at a high yield of 4.30%.
A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a negative 63.4 basis points.
The two-year US Treasury yield, which typically moves in step with interest rate expectations, was up 5.8 basis points at 4.341%. (Reporting by Alden Bentley and Chuck Mikolaczak; Editing by Leslie Adler)
financialpost.com