Treasuries Move Lower Amid Lingering Uncertainty About Interest Rate Outlook

(RTTNews) - After initially showing a lack of direction, treasuries moved to the downside over the course of the trading day on Monday.

Bond prices came under pressure in morning trading and remained firmly negative throughout the afternoon. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 5.8 basis points to 4.214 percent.

Treasuries extended the downward move seen over the two previous sessions amid lingering uncertainty about the outlook for interest rates following last week's Federal Reserve meeting.

The Fed's statement provided hope the central bank would slow the pace of rate hikes at upcoming meetings, although the optimism was partly offset by hawkish comments from Fed Chair Jerome Powell.

Traders were also looking ahead to the U.S. midterm elections on Tuesday and the release of consumer price inflation data on Thursday.

The midterm elections will determine whether Democrats maintain control of Congress, while the inflation data could impact the outlook for interest rates.

Economists expect a modest slowdown in the annual rate of consumer price growth, which could bolster the case for a slowdown in the pace of rate hikes.

Amid another quiet day on the U.S. economic front, trading on Tuesday may be impacted by reaction to the results of the Treasury Department's auction of $40 billion worth of three-year notes.