Treasury yields were trading slightly lower Wednesday morning, following a modest downward revision to a reading on fourth-quarter U.S. economic growth.
What happened
-
The yield on the 2-year Treasury
BX:TMUBMUSD02Y
fell 4.1 basis points to 4.671%, from 4.712% on Tuesday. -
The yield on the 10-year Treasury
BX:TMUBMUSD10Y
was 4.291%, down 2.3 basis points from 4.314% on Tuesday. -
The yield on the 30-year Treasury
BX:TMUBMUSD30Y
fell 1.4 basis points to 4.426% from 4.440% on Tuesday.
What drove markets
In data released on Wednesday, the first revision of fourth-quarter U.S. GDP showed the economy grew slightly lower than the 3.3% annual pace that was initially reported. The pace was downgraded to 3.2%, which was nonetheless robust.
Separately, the U.S. trade deficit in goods widened by 2.6% to $90.2 billion in January, according to the Commerce Department’s advanced estimate. The data comes a day ahead of the personal-consumption expenditure price index for January, the Fed’s favored inflation gauge.
For now, fed funds futures traders are pricing in a 97.5% probability that the Fed will leave interest rates unchanged at between 5.25% and 5.5% on March 20, according to the CME FedWatch Tool. The chance of at least a 25-basis-point rate cut by June is seen at 62.9%.
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