U.S. Treasury yields rose slightly Tuesday as traders weighed the prospects of higher Federal Reserve rates going forward.
The yield on the benchmark 10-year Treasury note was up more than 1 basis point at 3.449%, while the yield on the 30-year Treasury bond climbed less than a basis point to 3.654%. Yields move inversely to prices.
Investors remain focused on the likely trajectory of monetary policy, as the Federal Reserve continues its efforts to rein in inflation against the backdrop of persistent concerns about economic growth, and following several banking collapses that caused chaos in bond markets over the past month.
The Fed isn’t scheduled to meet until early May, but traders are pricing in a 60% chance that the central bank will hike rates by 25 basis points next month, according to the CME Group’s FedWatch tool.
To be sure, “this could change quickly and dovishly if April brings more problems in the US banking system,” wrote Nicholas Colas, co-founder of DataTrek Research. “It could also wander its way back to being hawkish again if there are no further signs of financial system stress and banks say they are not curtailing lending during their Q1 earnings calls.”
Wall Street is also weighing a spike in oil prices that led stock markets higher to start the new trading month on Monday.
On the data front, JOLTs job openings figures for February are due at 10 a.m. ET.
