The U.S. 10-year Treasury yield dipped on Wednesday after the release of minutes from the latest Federal Reserve meeting suggested the central bank was moving closer to a rate cut.
The yield on the 10-year Treasury was down more than 2 basis points at 3.797%. The 2-year Treasury yield slid to 3.931% after falling about 7 basis points.
Yields and prices move in opposite directions. One basis point equals 0.01%.
The summary of the minutes from the Fed's July meeting said that the "vast majority" of participants "observed that, if the data continued to come in about as expected, it would likely be appropriate to ease policy at the next meeting."
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Since that meeting, uncertainty about the economy and worries about an economic slowdown have at times raised concerns about whether the Fed should have already begun cutting interest rates. However, retail sales figures and weekly initial jobless claims data last week somewhat eased investor concerns.
Markets are firmly pricing in an interest rate decrease at the next meeting in September. CME Group's FedWatch Tool showed that traders are more so questioning how big of a cut will come.
As the week continues, investors will also be watching out for any comments from Fed officials made at the annual Jackson Hole symposium that kicks off Thursday. Federal Reserve Chair Jerome Powell is set to speak Friday, rounding out a week that is relatively light on the data front.
Money Report
Investors on Wednesday also monitored the nonfarm payroll revision, which showed there were 818,000 fewer jobs than originally reported in the 12-month period through March 2024.
"It reconciles some of the distortion between the establishment and household surveys. It still shows we were adding jobs but at a slower pace," said Gregory Faranello, head of U.S. rates at AmeriVet Securities. "In the end, it validates the lower yield story, current levels, and direction of the rate market. The pricing for September remains between 25 and 50 [basis points]."
