U.S. Treasury yields edged lower on Tuesday as investors awaited key economic data releases and prepared for the Federal Reserve's upcoming interest rate decision. The 10-year Treasury yield dropped 2 basis points to 5.114%, while the 30-year Treasury bond yield also fell 2 basis points to 5.45%. The 2-year Treasury note yield remained relatively unchanged at 4.757%. Investors are closely monitoring these movements as they assess the inflationary landscape ahead of the Fed's policy meeting next week.
The market is focused on several upcoming economic indicators, including housing starts and monthly pending home sales data for September, which are set to be released later on Tuesday. Additionally, weekly initial jobless claims will be published on Thursday, and the S&P Global Composite PMI Flash will be out on Friday. These reports will provide further insights into the state of the economy and could influence the Fed's decision-making process.
Traders are currently pricing in an 82% chance that the Federal Reserve will keep interest rates steady at its next meeting, according to the CME FedWatch Tool. The latest figures for the personal consumption expenditures index, the Fed's preferred inflation gauge, are also expected to be released, adding to the anticipation surrounding the central bank's policy decision.