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Short-term Treasury yields tick higher ahead of Fed rate decision

Short-term U.S. government debt yields rose on Wednesday as investors awaited the Federal Reserve's highly-anticipated monetary policy decision.

The yield on the 2-year Treasury note — the coupon maturity most sensitive to Fed policy expectations — rose slightly to 2.658 percent, while the benchmark 10-year Treasury note was unchanged at 2.825 percent. Bond yields move inversely to prices.

The Federal Open Market Committee (FOMC) is set to conclude its two-day meeting today, with expectations for an interest rate hike becoming increasingly dovish. The central bank is mostly expected to raise the federal funds rate, however expectations for further hikes in 2019 have tempered as traders grow increasingly nervous around the prospect of cooling economic growth and a decline in inflation expectations.

"We don't feel there's any reason to hike today," Brett Ewing, chief market strategist at First Franklin, told CNBC's "Street Signs Europe" on Wednesday. "I think the Fed has put themselves in a box and guided the market into this hike."

He added: "When you look at the inflation numbers here in the United States, they've actually been moderating here for the last four or five months."

President Donald Trump again ramped up pressure on the Fed Tuesday, urging the central bank to avoid making "yet another mistake." The president gave particular attention to a Wall Street Journal editorial, which said "economic and financial signals suggest he (Fed Chairman Jerome Powell) should pause."

On the data front, investors are likely to monitor third-quarter current account figures at around 8:30 a.m. ET, with existing home sales for November due to be released later in the session.

- CNBC's Sam Meredith contributed to this report.

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