U.S. Treasury Yields Slip as Investors Assess Fed Meeting Minutes

WASHINGTON, D.C. — U.S. Treasury yields decreased slightly on Wednesday as investors reacted to the Federal Reserve‘s meeting minutes from its July session. The 10-year note dipped about 1 basis point to 4.298%, while the two-year yield fell about 1 basis point to 3.74%. One basis point equates to 0.01%, with yields and prices moving inversely.

Investors sifted through the Fed’s meeting minutes from its Federal Open Market Committee meeting in July, where it was decided that interest rates would remain unchanged. The minutes revealed concerns over inflation and the labor market. However, most members felt it was premature to lower interest rates. “Participants generally pointed to risks to both sides of the Committee’s dual mandate, emphasizing upside risk to inflation and downside risk to employment,” the minutes stated.

The discussion held particular significance as Fed Governors Christopher Waller and Michelle Bowman expressed differing opinions on the decision. This marked the first time multiple voting Fed officials have publicly opposed a decision since 1993.

Global central bankers are set to convene in Jackson Hole, Wyoming, from Thursday to Saturday for the Fed’s annual economic symposium, an event that will be closely monitored for clues about upcoming monetary policy changes. Fed Chairman Jerome Powell is scheduled to deliver a speech on Friday.

Current market dynamics show traders are anticipating an 83% likelihood of interest rate cuts by September, according to CME statistics. “We expect this year’s Jackson Hole meeting to offer an opportunity for Powell to again nod towards monetary easing,” said Andrzej Skiba, head of BlueBay U.S. Fixed Income at RBC Global Asset Management. “While there are some hot spots in this month’s inflation reading, it’s probably not enough to deter the doves on the committee.”