U.S. Treasury yields fell slightly on Thursday morning, as investors digested comments from the U.S. Federal Reserve, suggesting it might taper its asset purchases if the economy continues to recover rapidly.
The yield on the benchmark 10-year Treasury note dipped to 1.673% shortly after a.m. ET. The yield on the 30-year Treasury bond fell to 2.376%. Yields move inversely to prices.
The 10-year Treasury yield topped 1.68% in the previous session, after minutes from the Fed’s April meeting showed the central bank would reconsider its easy monetary policy if the economy continued to rapidly improve.
“A number of participants suggested that if the economy continued to make rapid progress toward the Committee’s goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases,” the meeting summary stated.
Richard Kelly, head of global strategy at TD Securities, told CNBC’s “Street Signs Europe” on Thursday that the Fed’s comments were not a sign that it was about to start tapering but was instead just a “shot across the bow for markets.”
He didn’t think tapering would “even start till next year so this is just going to be a long road of talk for now.”
Given that fuller employment is one of the Fed’s goals, investors will be keeping a close eye on weekly jobless claims data, set to be released at 8:30 a.m. ET.
New claims for unemployment benefits are expected to total 452,000 for the week ended May 15, slightly lower than 473,000 in the week prior, according to economists polled by Dow Jones.
Auctions are due to be held Thursday for $40 billion of 4-week bills, $40 billion of 8-week bills and $13 billion of 9-year 8-month Treasury inflation-protected securities.
— CNBC’s Yun Li contributed to this market report.
