U.S. Treasury yields inched higher on Wednesday ahead of the Federal Reserve’s latest policy decision.
The yield on the benchmark 10-year Treasury note rose slightly to 0.926%, while the yield on the 30-year Treasury bond climbed 1 basis point to 1.675%. Yields move inversely to prices.
It is expected that the Fed will have an improved long-term view due to the rollout of the coronavirus vaccine, when it releases its economic outlook at 2 p.m. ET. Chairman Jerome Powell will hold a press conference at 2:30 p.m. ET.
Some investors expect the central bank will change the duration of the bonds it is buying, while others just expect it to detail guidelines it will use to make changes to the program.
“The biggest question remains whether the FOMC extends the weighted average maturity of QE purchases or holds off on that move until the outlook deteriorates further,” Ian lyngen, BMO’s head of U.S. rates, said in a note. “It’s notable that most market participants view the decision as a matter of timing; it’s not if the Fed extends the WAM of bond buying, rather it’s when.”
Elsewhere, investors continued to monitor progress on the stimulus talks. House Speaker Nancy Pelosi called a meeting of congressional leaders on Tuesday to discuss the coronavirus relief funding. Senate Majority Leader Mitch McConnell told reporters as he was leaving the Capitol that “significant progress” was being made on the stimulus package, according to NBC News.
Retail sales data for November is due out at 9:30 a.m. ET, while December figures from the Markit purchasing managers’ index is expected at 10:45 a.m. ET.
Auctions will be held on Wednesday for $25 billion of 105-day bills and $30 billion of 154-day bills.
— CNBC’s Patti Domm contributed to this article.
