Treasury yields flat ahead of speech from Fed Chair Powell

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U.S. Treasury yields wavered on Wednesday morning, ahead of a speech by Federal Reserve Chairman Jerome Powell later in the day.

The yield on the benchmark 10-year Treasury note rose slightly to 1.043% at 4 a.m. ET, while the yield on the 30-year Treasury bond climbed to 1.803%. Yields move inversely to prices.

Treasurys

U.S. government bond yields were steady early in the trading session, with Powell expected to give an update on the central bank’s economic outlook and monetary policy amid the pandemic.

Many investors hope Powell and his colleagues will steer clear of the word “tapering,” the process by which the central bank would curb its monthly bond purchases that have helped keep the financial system adrift with cash and encouraged investors to take on risk despite rich equity valuations.

The Fed is due to release its interest rate decision at 2 p.m. ET, with Powell expected to speak to reporters at 2:30 p.m. ET.

The rollout of coronavirus vaccines helped lift the International Monetary Fund’s global economic outlook, which was released Tuesday. The IMF is now forecasting the global economy to grow by 5.5% in 2021, 0.3% higher than what it predicted in October.

December data for durable goods orders is expected to be released at 8:30 a.m. ET on Wednesday.

Weekly EIA stock change data for gasoline, crude oil, Cushing crude oil and distillate is then due to come out at 10:30 a.m. ET.

Auctions will be held Wednesday for $25 billion of 105-day bills, $30 billion of 154-day bills and $28 billion of 2-year floating-rate notes.

CNBC’s Thomas Franck contributed to this report.

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