Treasury yields throb higher as investors are waiting for Fed meeting minutes

February 23, 2023: -On Wednesday, U.S. Treasury yields increased as investors awaited the outcome of the Federal Reserve’s recent meeting minutes and assessed the outlook for monetary policy.

The yield on the 10-year Treasury surged about one basis point at 3.964%. It had briefly increased as high as 3.966% earlier in the session, a level previously seen in early November.

The 2-year Treasury yield last traded at around 4.706%, rising marginally on the day.

Yields and prices move in opposite directions. One basis point is equivalent to 0.01%.

Investors considered the Fed’s next policy moves, including interest rates, after various Fed officials gave hints that further increases could be on the horizon.

On Wednesday, many hope for fresh clues when the minutes from the central bank’s previous meeting on January 31 and February 1 are due to be published. The Fed hiked interest prices by 25 basis points then, though a lot of central bank officials confirmed they favour a 50-basis point increase.

It was the eighth consecutive speed hike as the Fed’s fight against persistently increased inflation continued.

Earlier this month, consumer and wholesale inflation readings came in higher than expected every month for January.

Meanwhile, Fed speakers indicated that economic data would form the basis for future policy decisions, which sparks concerns regarding further and potentially steeper price increases.

Many investors are tensed about the impact of high-interest rates on the U.S. economy and fear that the speed of rate hikes could lead to a recession.