Treasuries Move Modestly Higher Ahead Of Fed Announcement

(RTTNews) - After ending yesterday's lackluster session roughly flat, treasuries saw modest strength during the trading day on Tuesday.

Bond prices recovered from initial weakness and moved slightly higher over the course of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.2 basis points to 4.385 percent.

The ten-year yield added to the minuscule drop seen during Monday's trading, continuing to give back ground after close higher for five straight sessions last week.

The uptick by treasuries came as traders continued to look ahead to the Federal Reserve's highly anticipated monetary policy announcement on Wednesday.

While the Fed is widely expected to lower rates by another quarter point, traders are likely to pay close attention to the accompanying statement as well as officials' latest economic projections, including their forecasts for rates.

Recent data showing inflation remains sticky has led to some worries the Fed will lower rates slower than previously anticipated next year.

However, bond traders largely shrugged off a Commerce Department report showing stronger than expected retail sales growth in the month of November.

Trading on Wednesday is likely to be driven by reaction to the Fed's monetary policy decision and updated economic projections.