Treasuries yields rise ahead of FOMC statement

U.S. Treasury yields were mostly higher in uneven trading session on Wednesday as the market awaits the Federal Reserve’s likely action to commence tapering asset purchases while digesting news that upcoming debt auction sizes will be cut.

The benchmark 10-year yield, which fell to a 2-1/2-week low of 1.519% earlier in the session, was last up 1.9 basis points at 1.5664%. The two-year yield, which hit a 19-month peak last week, fell to a session low of 0.444% on Wednesday before rising to as high as 0.5%.

At the end of its two day meeting later on Wednesday, Fed policymakers are widely expected to reveal plans to reduce the central bank’s monthly $120 billion purchases of Treasuries and mortgage-backed securities by $15 billion a month starting in November or December, which would end the program in mid 2022.

Fed Chair Jerome Powell and the Fed committee have done a pretty good job of threading this needle with clear, concise communication, keeping investors relatively calm and making sure they frame exactly what they are looking to do, according to some commentators.