U.S. Treasury yields edged higher Wednesday as Wall Street awaits the Federal Reserve’s interest rate decision and subsequent press conference with chair Kevin Warsh.
The yield on the 10-year U.S. Treasury note — the key benchmark for U.S. government borrowing — rose 2 basis points to 4.624%.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, was up 3 basis points at 4.308%. The longer-dated 30-year Treasury bond yield was broadly flat at 5.10%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The rate-setting Federal Open Market Committee is expected to leave rates unchanged at the range of 3.5% to 3.75%, with markets instead pricing in a 76% chance of a September hike, according to the CME Group’s FedWatch tool.
Higher energy prices and renewed tensions with Iran have complicated the picture for Fed Chairman Kevin Warsh, despite cooler inflation data.
While Warsh took over a Fed that has seen inflation exceed its 2% target since 2021, the consumer price index — a broad measure of inflation — posted an unexpected decline last month, bringing the annual inflation rate down to 3.5% in June. But in the weeks that followed, oil prices jumped again amid the escalating conflict in the Middle East.
Meanwhile, U.S.-Iran tensions flared up again late Tuesday, as Iran targeted American forces in the Middle East with ballistic missiles, U.S. Central Command said.
Centcom in a post on X said that the attack originated from Iran, but all missiles were intercepted. “Islamic Revolutionary Guard Corps forces launched multiple ballistic missiles from Iran in an attempted surprise attack on U.S. forces based in the Middle East.”
— CNBC’s Jessica Dickler also contributed to this report.