U.S. Treasury yields fell on Monday as investors look ahead to the Federal Reserve’s next meeting and await key inflation data.
At 4:13 a.m. ET, the 10-year Treasury yield slipped more than nine basis points to 4.5262%, while the 2-year Treasury yield was last trading at 4.1971% after falling more than seven basis points.
One basis point equals 0.01% and yields move inversely to prices.
Treasurys
Investors are gearing up for a busy week, with the Fed set to announce its next monetary policy decision at its January meeting on Wednesday.
The Fed is facing pressure from newly inaugurated President Donald Trump, who said he expects to see interest rates come down during a keynote address at the World Economic Forum in Davos, Switzerland, last week.
“I’ll demand that interest rates drop immediately,” Trump said at the forum, speaking to an audience of global leaders. “And likewise, they should be dropping all over the world. Interest rates should follow us all over.”
However, traders are pricing in a more than 99% chance that the Fed will leave interest rates unchanged, according to the CME Group’s FedWatch tool. At its December meeting, the Fed penciled in only two interest rate cuts in 2025.
Investors will also await the release of the personal consumption expenditures price index for December on Friday — the Fed’s preferred inflation gauge — which will offer fresh insights into the health of the U.S. economy.
And it’s set to be a major earnings week, with investors anticipating results from four out of seven companies in the “Magnificent Seven,” including Meta, Apple, Microsoft, and Tesla. Other big companies reporting results are Starbucks, Boeing, General Motors, Visa, and Exxon.