U.S. Treasury yields were steady on Wednesday, amid investor concerns around the omicron variant and the Federal Reserve’s plans to potentially taper faster than expected.
The yield on the benchmark 10-year Treasury note was flat at 1.451% at around 1:00 p.m. ET. The yield on the 30-year Treasury bond added less than 1 basis point to 1.799%. Yields move inversely to prices and 1 basis point is equal to 0.01%. Yields rose earlier in the day on Wednesday.
Investors continue to watch for developments on the new omicron Covid-19 variant, with uncertainty around its rate of transmissibility and fears that it could evade vaccines.
Meanwhile, monetary policy has also been in focus for investors. Fed Chairman Jerome Powell indicated in a testimony in front of Congress on Tuesday that the central bank may quicken the pace of its asset tapering schedule.
Powell said that he thought the Fed could pull back its bond-buying program faster than the $15 billion-a-month schedule announced in November.
“I think that the taper need not be a disruptive event in markets. I don’t expect that it will be. It hasn’t been so far. We’ve telegraphed it,” Powell said during Congressional testimony on Wednesday.
Bob Parker, an investment committee member at Quilvest Wealth Management, told CNBC’s “Squawk Box Europe” on Wednesday that he believed that the Fed’s potential plans to now finish tapering by March or April was “justified.”
Parker pointed to the rebound in economic growth and inflation, and said that it was “fairly clear that inflation as we go into the first quarter of next year is probably going to stay at current levels.”
On Wednesday, payroll services firm ADP reported 534,000 jobs added in November, above expectations of 506,000.
Elsewhere, the ISM Markit manufacturing PMI came in lower than expected, but the ISM version matched estimates. A reading for construction spending in October rose slower than expected but saw positive revisions to help offset the miss.
Auctions are due to be held on Wednesday for $40 billion of 119-day bills and $40 billion of eight-day bills.
