10-year Treasury yield falls as investors look to key data

U.S. Treasury yields were lower on Monday as investors awaited key economic data slated for the week and markets considered the latest U.S. political developments.

The 10-year Treasury was down about 2 basis point at 4.222%. The 2-year Treasury yield was up by a basis point to 4.515%.

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

Investors looked ahead to key data due this week that is set to provide fresh hints about the state of the economy and could inform the Federal Reserve's decision-making when it comes to monetary policy.

That includes a reading of the second-quarter gross domestic product on Thursday as well as the latest personal consumption expenditures price index on Friday. The latter is the Fed's preferred inflation gauge and could provide an indication of the timeline for interest rate cuts.

Fed officials have in recent weeks continued to indicate that they are looking for more data to show inflation is easing before deciding to ease monetary policy. The central bank is set to meet later this month and is now in the so-called blackout period, meaning officials cannot publicly remark on monetary policy and economic topics again until after the meeting.

Investors are widely expecting interest rates to be left unchanged this month. According to CME Group's FedWatch tool, traders were last pricing in an around 96% chance of a September rate cut.

Markets also assessed the latest developments in U.S. politics after President Joe Biden dropped out of the race for the White House on Sunday and endorsed Vice President Kamala Harris as the Democratic nominee.