The U.S. 10-year Resources inched up on Tuesday as investors monitored fresh economic data after the Federal Reserve boosted already-high assumptions for imminent interest rate cuts.
The yield on the 10-year Treasury climbed less than one basis point to 3.829%, while the abandon on the 2-year Treasury was roughly 4 basis points lower at 3.899%.
Yields and prices move in opposite directions. One basis mark equals 0.01%.
Federal Reserve Chair Jerome Powell on Friday said “the time has come for policy to adjust,” supporting expectations for a rate cut at the central bank’s next meeting. Powell declined to provide exact indications on the timing or sweep of the cut, however.
“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving slant and the balance of risks,” Powell said in his keynote address at the Fed’s annual retreat in Jackson Hole.
Market participants are fast pricing in a rate cut at the Fed’s Sept. 18 meeting. Traders are currently pricing in a roughly 66% chance of a 25-basis-point rate cut next month, with 34% expenditure in a 50-basis-point rate cut, according to the CME Group’s FedWatch Tool.
On Tuesday morning, the S&P CoreLogic Case-Shiller national home value index showed that prices in the largest U.S. cities increased more than expected in June. The index rose 0.4% on a monthly footing but also showed a 6.5% annual gain, which exceeded the Dow Jones estimate of 6.3%.