The yield on the 10-year Treasury slid on Wednesday as traders await ADP payroll data that would shed more light on the state of the U.S. economy.
The benchmark yield was down about 3 basis points to trade at 4.48%, while the 2-year Treasury yield fell less than 2 basis points at 4.19%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Treasurys
The bond market moves come after Federal Reserve Vice Chair Philip Jefferson said on Tuesday that the central bank should be careful how it adjusts interest rates amid an uncertain policy environment.
In broad terms, the Fed governor said he sees the economy strong, with inflation easing back on a “bumpy” road to the central bank’s 2% goal and a labor market in a “solid position.”
Investors will likely be looking ahead to the ADP National Employment Report, which should shed light on the state of the U.S. employment market. The market is expecting the private payroll report to say that U.S. companies added 151,500 jobs in January, which would be higher than the 122,000 added in December, according to FactSet.
Fed Governor Michelle Bowman, a voting member of the Fed’s interest rate-setting committee, is also due to speak at a conference organized by the Kansas Bankers Association later at 8:30 a.m. on Wednesday.
Investors are also concerned that ongoing trade friction could slow economic growth and lead to higher bond prices.
China announced on Tuesday that it will respond with a series of retaliatory measures against the U.S. and will impose additional tariffs of up to 15% on select imports. The move comes after President Donald Trump imposed on Saturday a 10% tariff on goods coming from China.
On the economic front, they’re anticipating the January nonfarm payrolls report, which is due to be published on Friday and will provide insights into the employment picture.