Traders work the floor of the New York Stock Exchange, May 31, 2023.
U.S. Treasury yields were little changed on Tuesday as investors considered what could be on the horizon for the economy and Federal Reserve monetary policy.
The yield on the 10-year Treasury was up by less than 1 basis point at 3.697%. The 2-year Treasury yield was trading by 1 basis point higher at 4.293%.
Yields and prices have an inverted relationship and one basis point is equivalent to 0.01%.
Investors reflected on recent economic developments, including the debt ceiling crisis that was resolved on Friday before the U.S. defaulted on it its debt obligations. They also considered what could be next for the economy, including prospects of a recession or further interest rate hikes by the Federal Reserve.
Recession fears were swayed slightly by last week's May jobs report, which showed that payrolls rose by much more than expected during the month, reflecting resilience in the economy.
However, it prompted some investors to believe that the Fed would tighten monetary policy further as the central bank first started hiking interest rates in an effort to cool the economy, including the labor market. Central bank officials have repeatedly said that their policy decisions will likely depend on upcoming data.
The Fed is set to make its next interest rate policy announcement on June 14, just a day after the latest consumer inflation data is expected.
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