U.S. Treasury yields moved higher Wednesday as investors parsed meeting minutes from the Federal Reserve signaling more rate hikes may be needed.
The 10-year Treasury yield was trading more than 5 basis points higher at 4.274%. The 2-year Treasury was up by nearly 4 basis points at 4.991%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
The central bank said in meeting minutes released Wednesday that the inflation fight is far from over unless economic conditions change. The minutes are connected to the July meeting, at which the central bank raised interest rates by a quarter percentage point.
“With inflation still well above the Committee’s longer-run goal and the labor market remaining tight, most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy,” the meeting summary stated.
The Fed has hiked rates at all but one of its meetings since March 2022, a total of 11 times. It kept rates unchanged at its meeting in June this year to assess whether the rate hikes had had the desired effect of cooling the economy and easing inflation, and to allow their full effect to take hold.
Housing data released Wednesday morning came in mixed. U.S. new home construction rose 3.9% month-over-month to 1.45 million in July, topping StreetAccount’s consensus estimate of 1.44 million. However, building permits increased just 0.1% on a monthly basis, coming in at 1.44 million and marking a 13% year-over-year decline.
Elsewhere, July’s U.K. inflation report was published Wednesday, with the headline consumer price index coming in at 6.8% on an annual basis. That was in line with expectations and marked a sharp decline from June’s reading of 7.9%. The core consumer price index, however, remained unchanged at 6.9%.
