The 10-year U.S. Treasury yield fell sharply on Wednesday, giving back some of its recent gains as investors monitored policy changes at global central banks.
The yield on the benchmark 10-year Treasury note dropped 8 basis points to 1.534% in afternoon trading. The yield on the 30-year Treasury bond fell more than 10 basis point to 1.947%. Yields move inversely to prices and 1 basis point is equal to 0.01%.
The moves in debt markets came after the Bank of Canada announced on Wednesday that it was ending its quantitative easing program, joining a growing number of central banks that are rolling back their pandemic era programs. The U.S. Federal Reserve is set to meet again next week.
"Today we're seeing a big flattening of the yield curve, with long rates coming down and short rates moving up. It was starting to happen a day or two ago, but I think what it's reflecting now is Canada's starting to move, Bank of England will probably cut rates, and you tend to get a flattening of the yield curve when people start to see the rate hike cycle really kick in," said Kathy Jones, chief fixed income strategist for Schwab Center for Financial Research.
"Now, the U.S., we're not even done easing, let alone tightening, so it might be a little premature here," Jones added.
The benchmark 10-year yield briefly traded above 1.68% last week but has fallen 15 basis points since then. The 2-year Treasury yield has climbed roughly 12 basis points over the same period.
Companies continued to report strong earnings in the U.S., which saw the S&P 500 notch its 70th intraday high of 2021 and 57th record close of the year.
However, worries around rising inflation, supply chain issues and a slowdown in the economy, continue to weigh on investors' minds.
New orders for durable goods fell less than expected in September, according to the Census Bureau. The rise for August was revised down to 1.3% growth from 1.8%, however.
Auctions were held on Wednesday for $40 billion of 119-day bills and $61 billion of seven-year notes.
— CNBC's Pippa Stevens contributed to this market report.