**Treasuries Exhibit Positive Movement Amid Economic Optimism**
After an initial lack of direction, U.S. treasuries experienced an upward trend during Tuesday's trading session.
In early afternoon, bond prices saw a significant surge, culminating in moderate gains by day's end. Consequently, the yield on the benchmark ten-year note, inversely related to its price, decreased by 3.5 basis points, settling at 4.143 percent. This marks the fourth successive session of decline for the ten-year yield, reaching its lowest closing level in over four months.
Treasuries continued to ride on the wave of optimism regarding future interest rate policies ahead of the Federal Reserve's monetary policy announcement scheduled for Wednesday.
While the consensus is that the Fed will maintain the current interest rates, the statement accompanying this decision could greatly influence projections for the central bank's next move in September.
Given Fed officials' stance on needing "greater confidence" in the slowing of inflation before reducing rates, recent inflation data has bolstered optimism for a possible rate cut in September.
According to CME Group's FedWatch Tool, there is currently an 87.7 percent probability of a quarter-point rate cut by the Fed in September, with an 11.9 percent chance of a half-point reduction.
On another note, traders largely overlooked a report from the Conference Board indicating an unexpected rise in U.S. consumer confidence for July, despite the previous month's figure being revised downward.
The Conference Board reported that its consumer confidence index increased to 100.3 in July from a revised 97.8 in June. Economists had anticipated a slight decline to 99.5, down from the originally reported 100.4 for the prior month.
While the Fed's policy announcement is set to be the primary focus on Wednesday, traders will also be monitoring ADP's report on private sector employment.
