Treasury yields decline as investors weigh interest rate policy path ahead

U.S. Treasury yields fell on Wednesday as investors considered the outlook for interest rates and awaited fresh data that could provide hints about the state of the economy.

At 4:45 a.m. ET, the yield on the 10-year Treasury was over three basis points lower at 4.3013%, The 2-year Treasury yield was last down by more than three basis points to 4.6991%.

Yields and prices move in opposite directions and one basis point is equivalent to 0.01%.

Investors assessed the outlook for interest rates as they digested comments from Federal Reserve Governor Christopher Waller and looked to upcoming economic data.

Waller on Tuesday said that monetary policy was "well positioned" to achieve the Fed's goals of slowing the economy and lowering inflation. Many investors took this as a sign that the central bank could be done hiking rates.

Uncertainty about the path ahead for monetary policy and especially around how long rates are set to stay elevated and when they may be cut have grown louder among investors in recent weeks. One last Fed meeting is scheduled for this year on Dec. 12-13. Markets are expecting the central bank to keep rates unchanged then and are hoping for hints about when policymakers believe rates could come back down.

Concerns about the state of the economy and whether higher rates will lead to a recession have also continued. Data published Tuesday suggests that consumers still expect economic contraction , however their overall confidence in the economic outlook rose in November.

Fresh insights into how the economy is faring could come Wednesday, when a second preliminary reading of the gross domestic product for the third quarter is expected.