By Sam Goldfarb
U.S. government bond prices edged higher Wednesday, reflecting continued anxiety among investors about the economy as some parts of the U.S. and China report an increase in coronavirus cases.
In recent trading, the yield on the benchmark 10-year U.S. Treasury note was 0.743%, according to Tradeweb, compared with 0.754% Tuesday.
Yields, which fall when bond prices rise, have held to a relatively tight range in recent sessions after a spike in volatility earlier in the month.
The 10-year yield reached as high as 0.784% Tuesday after the Commerce Department reported surprisingly strong retail sales numbers. But it fell again after some states reported their largest one-day increases in coronavirus cases and authorities in China canceled flights in and out of Beijing in response to a new outbreak in the city.
In recent weeks, many states have moved to loosen restrictions on social and business activity. Still, bond investors remain concerned that the economy is "reopening to a different world" as the virus lingers and people continue to practice some forms of social distancing, said Priya Misra, head of global rates strategy at TD Securities in New York.
Elsewhere in the fixed-income market, there were signs that a recent rally in corporate bonds might be losing some momentum.
In recent trading, BlackRock's iShares U.S. investment-grade corporate bond ETF was down 0.5%, after falling 0.3% Tuesday.
The ETF had surged Monday after the Federal Reserve announced it would start buying individual corporate bonds after previously buying only corporate-bond ETFs.
On Tuesday, however, Fed Chairman Jerome Powell suggested the central bank wasn't necessarily planning to increase the amount of corporate bonds it purchased -- directly or indirectly -- but was instead just shifting the way it purchased the bonds.
The central bank doesn't want "to run through the bond market like an elephant, snuffing out price signals and things like that," he said at a congressional hearing. "We want to be there if things turn bad in the economy or things go in a negative direction."
Write to Sam Goldfarb at email@example.com