U.S. government-bond yields held gains Wednesday ahead of the conclusion of the Federal Reserve’s latest policy meeting.
The yield on the benchmark 10-year Treasury note, which helps set borrowing costs on everything from mortgages to corporate debt, was recently 1.268%, according to Tradeweb, compared with 1.235% at Tuesday’s close.
Investors were expecting the Fed to hold rates near zero and continue asset purchases, but were preparing to assess comments from Chairman Jerome Powell about the prospects for inflation and when the central bank might begin tapering its bond buying.
The Fed has said its monthly purchases of $120 billion in bonds would continue until the economy achieves “substantial further progress” toward the Fed’s goals of low unemployment and inflation reaching 2%. On Wednesday, the Fed said that “since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings.”
Yields, which fall when bond prices rise, have slipped in recent weeks, dragged down by a surge in cases of the Delta coronavirus variant that spurred investors to scale back their most optimistic forecasts for growth. Some said they are watching the Fed for signs of how it will balance efforts to achieve full employment with recent data showing inflation running hot.