U.S. Treasury yields were higher Tuesday as the Federal Reserve's meeting is due to kick off and investors assessed the outlook for monetary policy decisions from central banks around the world.
The 10-year Treasury yield was trading more than 4 basis points higher at 3.904%. The 2-year Treasury yield was also up more than 4 basis points at 4.887%.
Yields and prices have an inverted relationship. One basis point equals 0.01%.
Investors considered what could be next for interest rates in the U.S. and other key global economies. The European Central Bank, Bank of Japan and Federal Reserve are all due to announce rate decisions this week.
The Fed's meeting begins Tuesday and investors are widely expecting policymakers to announce a 25 basis point rate increase on Wednesday. The picture is, however, less clear when it comes to the other three Fed meetings scheduled for the year and what policy moves the central bank could make then.
Since their last meeting, officials have indicated that a range of options are on the table. That means both further rate hikes as well as an end to the Fed's rate-hiking campaign are possibilities.
Economic data is likely to play a key role in this. The latest consumer price index suggested that inflationary pressures are in fact easing.
Money Report
Guidance published alongside the rate decision and the post-meeting press conference Fed Chair Jerome Powell is expected to speak at will therefore be important for investors.
Elsewhere, markets are pricing in a 25 basis point rate hike from the ECB on Thursday, according to Refinitiv data. The Bank of Japan is expected to keep rates unchanged Friday and continue with its very loose monetary policy approach.
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On the data front, July's consumer confidence report for the U.S. is due Tuesday.
