TREASURIES-US yields up after refunding plan and as market awaits Fed signals

By Caroline Valetkevitch

NEW YORK, July 30 (Reuters) - U.S. 10-year Treasury yields rose on Wednesday as investors digested details of a Treasury refunding plan and as economic data showed the U.S. economy rebounded in the second quarter but that the underlying trend was weak.

Investors were also positioning ahead of the Federal Reserve's policy announcement later on Wednesday. The central bank is expected to leave its benchmark interest rate unchanged in the 4.25%-4.50% range, even though U.S. President Donald Trump has pushed for the Fed to cut borrowing costs.

Market participants may be looking for any signals of potential easing in September from the Fed.

Given that backdrop, investors could see some market swings following the announcement and during Fed Chair Jerome Powell's press conference afterwards, said Jason Pride, chief of investment strategy and research at Glenmede.

"It's kind of likely that we have that noise in markets," he said.

"You can easily see a situation where the newsflow feels like it's pointed in one direction and then pointed in the other direction," Pride said.

There is a "legitimate argument in either direction" on rates," he said, adding the impact tariffs would have was unclear.

Long-dated yields gained after the U.S. Treasury Department announced total quarterly refunding of $125 billion from August to October 2025, aimed at raising cash of $35.2 billion from private investors.

The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB was last up 3.4 basis points at 4.362%. The yield on the 30-year bond US30YT=TWEB was up 3.3 basis points at 4.901%.

Data showed gross domestic product increased at a 3.0% annualized rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its advance estimate of second-quarter GDP.

However, subsiding imports accounted for the bulk of the improvement. Other data showed U.S. private payrolls increased more than expected in July.

"Generally speaking, we're seeing an economy that's not running at robust pace, inflation is not hot by any standards... and generally speaking, the labor market has remained more resilient than expected," Pride said.

A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=TWEB, seen as an indicator of economic expectations, was at a positive 45.8 basis points.

The two-year US2YT=TWEB U.S. Treasury yield, which typically moves in step with interest rate expectations, rose 2.7 basis points to 3.902%.