US Treasury bond yields are showing a slight decline amid easing concerns about aggressive policy tightening by the Fed.
The yield on 5-year Treasury bonds fell by 0.6 basis points, reaching 2.711%, while the yield on 30-year bonds was 2.985% (-0.7 basis points). Meanwhile, the yield on 2-year Treasury bonds, reflecting expectations of short-term interest rates, decreased by 1.4 basis points to 2.474%, while the yield on 10-year bonds fell to 2.754% (-0.4 basis points).
The minutes of the Fed's May meeting showed that the Central Bank saw the need to raise interest rates quickly and potentially go further than the market had expected. However, the stock market rally after the publication of the minutes of the Fed meeting signaled that investors did not see any new "hawkish" signals.
Today, the attention of market participants will be focused on the publication of the personal consumption expenditure price index for April, which is the Fed's preferred inflation indicator. Economists expect that the PCE price index ex food, energy increased by 0.3% on a monthly basis and by 4.9% per annum.
In addition, the Reuters/Michigan Consumer Sentiment Index for May will be presented at 14:00 GMT. Consensus estimates suggest a decline in the index to 59.1 points compared to 65.2 points in April.