20.09.201703:22:00UTC+00U.S. Yields Rally as Investors Await Fed Meeting

Yields on U.S. Treasury notes edged up on Tuesday as investors looked forward to a new wave of economic data and the main event of the week: the Federal Reserve policy meeting.

The benchmark 10-year Treasury note yield, which moves opposite to its prices, rose to 2.241 percent, while the 30-year Treasury note yield also edged up to 2.811 percent.

On Tuesday, the Federal Open Market Committee started its two-day policy meeting. The U.S. central bank is anticipated to forward its rate normalization cycle. The Fed is also expected to announce plans to begin unwinding its $4.5 trillion portfolio of Treasuries and mortgage-backed securities, majority of which it acquired in its push to stimulate growth that has been stagnated by the financial crisis.

Policymakers have grown concerned regarding the effect of the low rate on stock markets while also dealing with weak inflation readings and slow wage growth.

There are doubts that the FOMC will hike rates in September. But now, more and more investors expect another rate hike by the end of the year.

On the data front, U.S. housing starts declined 0.8 percent to an annual rate of 1.18 million units, according to the Commerce Department. The figures indicated the limited impact of Hurricane Harvey on permits.