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Treasury yields fall as investors remain cautious

US Treasury yields fell on Wednesday morning as investors remained cautious after a sell-off in equity markets in the previous session.

The yield on the benchmark 10-year Treasury note fell 2 basis points to 2.7344% at 4:25 a.m. ET. The yield on 30-year Treasury bills fell 2 basis points to 2.9451%. Yields move inversely to prices and 1 basis point equals 0.01%.

The 10-year rate fell 10 basis points in the previous session as investors sought refuge in government bonds amid a sell-off in equity markets.

The tech-heavy Nasdaq Composite index fell 2.4% in the previous session after social media firm Snap warned of slowing growth.

Mixed economic data also appeared to weigh on investor sentiment.

On Wednesday, investors’ attention will be focused on the minutes of the Federal Reserve’s last meeting, scheduled for 2 p.m. ET. A more aggressive tightening of monetary policy by the Fed has raised concerns that it could contribute to slower economic growth.

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Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, said in a note on Wednesday that while a U.S. recession was not his company’s base case,the risks appear to be higher than the Fed admits.”

Ahmed said his team expects the Fed to tighten less in 2022 than it and the markets currently anticipate.

“Monitoring the true extent of recession risk and determining whether the Fed is pricing it correctly will be key to a number of asset allocation decisions in the months ahead,” he said.

Additionally, April’s durable goods orders data is due out at 8:30 a.m. ET.

Auctions are scheduled for $30 billion in 119-day notes, $48 billion in 5-year notes and $22 million in 2-year floating rate notes.


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