2018.12.1815:15:00UTC+00Treasuries Extend Upward Move Ahead Of Fed Announcement

Treasuries moved higher over the course of the trading session on Tuesday, extending the upward move seen over the two previous sessions.

Bond prices gave back ground after an initial move the upside but bounced back more firmly into positive territory. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 3.2 basis points to 2.825 percent.

The continued strength among treasuries came as traders looked ahead to the Federal Reserve's monetary policy announcement tomorrow afternoon.

With the Fed widely expected to raise interest rates by a quarter point, traders are likely to closely scrutinize the central bank's accompanying statement and forecasts for clues about future rate hikes.

Ahead of the announcement, President Donald Trump has been urging the Fed to refrain from its gradual pace of raising rates.

"Don't let the market become any more illiquid than it already is," Trump said in a post on Twitter. "Stop with the 50 B's. Feel the market, don't just go by meaningless numbers. Good luck!"

On the U.S. economic front, the Commerce Department released a report showing a substantial increase in U.S. housing starts in November, as a spike in multi-family starts more than offset a continued drop in single-family starts.

The Commerce Department said housing starts jumped by 3.2 percent to an annual rate of 1.256 million in November from the revised October estimate of 1.217 million.

Economists had expected housing starts to edge down to a rate of 1.225 million from the 1.228 million originally reported for the previous month.

The report also said building permits surged up by 5.0 percent to an annual rate of 1.328 million in November from the revised October rate of 1.265 million.

Building permits, an indicator of future housing demand, had been expected to dip to a rate of 1.259 million from the 1.263 million originally reported for October.

The Fed announcement is likely to be in the spotlight on Wednesday, overshadowing a report on existing home sales in November.