US Treasurys are under pressure on Tuesday as the Federal Open Market Committee begins its two-day policy meeting and after some better than expected manufacturing data. Tuesday’s selling has yields up nearly 5 basis points at the long end of the curve, and at their highest levels since the end of May.
Here’s a look at the scoreboard as of 10:06 a.m. ET:
- 2-year +2.4 bps at 86.5 bps
- 3-year +3.8 bps at 1.024%
- 5-year +3.9 bps at 1.346%
- 7-year +4.5 bps at 1.661%
- 10-year +4.6 bps at 1.872%
- 30-year +4.5 bps at 2.623%
Weakness comes ahead of the Fed’s latest policy decision, which is due out on Wednesday. Currently, fed fund futures data compiled by Bloomberg shows a 16.1% probability of a rate hike at Wednesday’s meeting and a 73.1% chance of a rate hike before the end of the year.
Tuesday’s selling has swung the yield curve steeper with the 2-10-year spread widening to more than 100 basis points for the first time since May.