Investors weigh the Fed’s policy and economic outlook

US Treasury yields fell slightly on Wednesday as investors factored in the outlook for the economy and central bank interest rates and looked to economic data for clues.

At 5:38 a.m. ET, the yield on the 10-year Treasury note was trading just over 2 basis points at 3.677%. The 2-year Treasury yield fell nearly 2 basis points, at 4.504%.

Yields and prices move in opposite directions. 1 basis point equals 0.01%.

Investors weighed what could be on the horizon for the economy and the Fed’s monetary policy, particularly in terms of interest rates, ahead of the June 13-14 central bank meeting.

At its latest meeting, the central bank indicated that its campaign to raise interest rates may end soon. However, Fed officials have since given mixed messages about whether they believe further tightening is necessary for the central bank to achieve its goals of easing inflation and cooling the economy.

Recent economic data pointed to the resilience of the economy, including continued strength in the labor market, which eased recession fears but also led some investors to believe in the possibility of a rate hike. About a quarter of traders think the Fed will raise interest rates when it meets next week, according to the CME FedWatch tool.

Little major economic data is expected before the meeting. On Wednesday, the trade balance and import and export numbers for April are expected.