U.S. Treasury Yields Drop After Weak Housing Starts Data
U.S. Treasury yields fell on Tuesday as investors processed weak housing data and considered inflationary pressures ahead of the Federal Reserve's upcoming interest rate decision. The 10-year Treasury yield dropped more than 4 basis points to 5.092%, while the 30-year bond yield declined over 5 basis points to 5.415%. Housing starts for September came in at 1.22 million, below expectations of 1.3 million and down 5.2% from August's revised estimate. Economists attributed the decline partly to labor shortages caused by U.S. immigration policies and rising costs due to geopolitical tensions affecting building materials. Investors are now pricing an 85% chance that the Fed will hold interest rates steady at its next meeting, up significantly from a month ago when it was around 42.4%. The data adds context as traders await key inflation figures like the personal consumption expenditures index and weekly jobless claims later in the week.
Topics: Federal Reserve housing starts inflation Treasury yields