10-year Treasury yield dips slightly as traders weigh Fed officials’ comments

The 10-year U.S. Treasury yield wavered Wednesday as bond traders digested the latest comments from Federal Reserve officials this week.

The 10-year Treasury yield slipped more than 2 basis points to 4.014%. The 2-year Treasury yield was last at 3.931% after declining 2 basis points.

One basis point equals 0.01%. Yields move inversely to prices.

On Monday, Minneapolis Fed President Neel Kashkari suggested that future interest rate cuts would be “modest” and reiterated that policy decisions would depend on economic data. The same day, Fed Governor Christopher Waller urged caution toward any future rate reductions.

On Tuesday, however, San Francisco Fed President Mary Daly said there is room for the central bank to lower rates further, following last month’s half point reduction in fed funds to 4.75% to 5.00%.

“We’re a long way from where it’s likely to settle,” she said. “So the decisions that are really in front of us are ones about how quickly to adjust towards that level. But it’s quite possible that we will have a neutral rate of interest that’s a little higher than the interest rate that we came in with.”

Investors early Thursday will study the latest reading on the state of U.S. consumer spending when September retail sales numbers are reported by the Commerce Department.

The retail sales report will likely show a month increase of 0.3%, a number that is adjusted for seasonal factors but not inflation, according to the Dow Jones consensus. That would show an increase of 0.1% in August and would be higher than the 0.2% inflation rate for the month as measured by the consumer price index.

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