With traders looking ahead to the Federal Reserve’s monetary policy announcement, treasuries moved mostly lower during trading on Tuesday.
Bond prices showed a lack of direction in morning trading before edging lower in the afternoon. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.5 basis points to 1.324 percent.
The modestly lower close by treasuries came as the Federal Reserve began its highly anticipated two-day monetary policy meeting.
The Fed is widely expected to leave monetary policy unchanged but could address the outlook for its asset purchase program.
The minutes of the Fed’s last meeting signaled the central bank was prepared to begin scaling back asset purchases by the end of the year.
With some recent disappointing economic data suggesting the Fed could push back its plans, traders are likely to pay close attention to the wording of the post-meeting statement.
On the U.S. economic front, new residential construction in the U.S. increased by more than expected in the month of August, according to a report released by the Commerce Department on Tuesday.
The report said housing starts jumped by 3.9 percent to an annual rate of 1.615 million in August from a revised rate of 1.554 million in July.
Economists had expected housing starts to increase to a rate of 1.580 million from the 1.534 million originally reported for the previous month.
The Commerce Department also said building permits spiked by 6.0 percent to an annual rate of 1.728 million in August from a revised rate of 1.630 million in July.
Building permits, an indicator of future housing demand, had been expected to drop to a rate of 1.610 million from the 1.635 million originally reported for the previous month.
The Fed’s monetary policy announcement is likely to be in the spotlight on Wednesday, overshadowing a report on existing home sales.