Treasury yields inch lower as investors consider economic outlook

U.S. Treasury yields dipped on Tuesday, as investors digested optimistic commentary from a Federal Reserve official and awaited the release of data that could provide hints about the economic outlook.

The 2-year Treasury yield was down more than 9 basis points at 4.763%. The 10-year Treasury yield was 3 basis points lower at 4.357%.

Yields and prices have an inverted relationship, and one basis point equals 0.01%.

Comments from Fed Governor Christopher Waller had raised hope earlier Tuesday that the central bank may not need to raise interest rates further. The official said that policy is "currently well positioned" to slow the economy and bring inflation back down.

Waller's commentary comes ahead of the Federal Open Market Committee's policy meeting on Dec. 12-13, during which the committee is widely expected to keep its key lending rate steady. Questions still linger around how long rates will stay elevated and when they will be cut, as recessionary fears persist.

Data released Tuesday showed consumer confidence improved in November, although most still expect a future recession. The Conference Board's index rose to 102 for the month, higher than a downwardly revised 99.1 from October and ahead of the Dow Jones estimate for 101.

Investors also looked ahead to various economic reports scheduled this week that could signal upcoming monetary policy decisions from the Federal Reserve.

Fresh inflation insights are expected on Thursday by way of the personal consumption expenditure price index — a key data point for the Fed.