U.S. Treasury yields inched lower Monday as investors look ahead to the central bank's interest rate decision and await a flurry of economic data this week.
The benchmark 10-year Treasury yield was down less than 1 basis point to 4.98%, and the 30-year Treasury bond yield declined 1 basis point to 5.302%. The 2-year Treasury note yield was barely changed at 4.6752%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Investors are keenly anticipating the main event of the week, which will be the Federal Reserve's interest rate decision on Wednesday. Traders are pricing in an over 90% chance that policymakers will hold interest rates steady at the current target range of 3.75% to 4%, per the CME FedWatch Tool .
Deutsche Bank analysts said they expect there to be more interest in Chairman Kevin Warsh's comments following the decision, with focus on how the Fed "balances still-elevated inflation and solid growth against the recent tightening in financial conditions."
"The broader message is still likely to be hawkish: our economists think recent inflation data support the case for further tightening over time, even if the Fed chooses to pause this week," the analysts said in a Monday note.
They added that Warsh is expected to clarify that tight financial conditions are not a substitute for higher policy rates.
Investors will also closely monitor the personal consumption expenditures index, the Fed's preferred inflation gauge, which will be released on Thursday.
Other economic data to be published this week includes the weekly ADP Employment Change and durable goods Orders for September on Tuesday; weekly initial jobless claims on Thursday; and further employment data on Friday.
