U.S. Treasury yields pulled back Tuesday morning after the 10-year and 30-year notes touched 24-year highs a day earlier. Traders now price a high probability the Federal Reserve holds rates steady, with minutes from its September meeting due Wednesday.
The benchmark 10-year Treasury yield slipped 3 basis points to 5.281% on Tuesday morning, retreating after reaching its highest level since April 2002 a day earlier. The 30-year yield eased by just under 3 basis points to 5.637%, after also climbing to a level not seen since May 2002. The 2-year note yield edged down by less than 2 basis points to 4.816%.
One basis point equals 0.01%, and yields move opposite to prices. The retreat followed a sharp climb on Monday, when the 10-year and 30-year recorded 24-year highs after fresh data from the Institute for Supply Management showed cooling services growth.
The ISM services PMI rose to 54.9 in September, in line with expectations but just below August's pace. The price index within the services gauge, meanwhile, climbed 1.4 points to 74.
Traders are now pricing in a 78% chance that the Fed will keep rates unchanged at its next meeting, according to the CME Group's FedWatch tool. The event of the week will be the release of the FOMC minutes from its September meeting on Wednesday.
Source: US Top News and Analysis
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