Treasury Yields Inch up as Markets Look Ahead to Fed Decision

Dow Jones10-19 22:43

1042 ET - Treasury yields are higher as investors size-up the Fed's approach ahead of its policy setting meeting at the end of the month. In a week light on economic reports, the CME FedWatch tool is currently indicating a 17% likelihood of a fed hike. BMO rate strategists see challenges for Chairman Warsh to deliver a momentum-setting pause while ensuring the market keeps a December hike fully priced in. "The hike-pause-hike pattern implies January will also see a hawkish pause; leaving March as 2027's first truly live meeting. Of course, this is something of an oversimplification and the performance of the real economy will ultimately determine the flexibility policymakers are afforded in further normalization," they say in a note. The 10-year Treasury yield is 5.127% versus Friday's 5.097%, the 2-year Treasury yield is 4.757% compared with 4.734%.

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