US yields edge higher ahead of Fed statement
Most U.S. Treasury yields edged higher on Thursday as traders waited for any insight from the Federal Reserve on future rate increases.
Fed policy makers are expected to leave key short-term lending rates at 2.00-2.25 percent on Thursday. They will release their policy statement at 2 p.m. (1900 GMT). There are expectations they may hint at a possible rate rise in December and more increases in 2019.
"Today we are waiting to see if there is any new information for rates to go higher," said James Barnes, director of fixed income at The Bryn Mawr Trust Co. in Davon, Pennsylvania.
Bond yields traded in a choppy session on Wednesday. They swung sharply in overnight trading on uncertainty over the U.S. midterm congressional election outcome.
The yield curve then flattened as traders reckoned split control of Congress would result in gridlock that would produce no fresh fiscal stimulus for the economy but also less likelihood of more federal borrowing.
By late trading, they rose on reduced safe-haven demand due to a rally in Wall Street shares and poor demand at a record $19 billion 30-year bond auction.
At 10:49 a.m. (1549 GMT), the yield on benchmark 10-year Treasury notes was marginally higher at 3.217 percent, which was still below the 7-1/2 year high of 3.261 percent set a month ago during a bond market rout.
The two-year yield, which is most sensitive to traders' view on Fed policy, was a tad higher at 2.949 percent. On Wednesday, it touched 2.969 percent, which was the highest since June 2008.