US Treasury yields fell on Thursday as investors digested the Federal Reserve’s latest policy decision and took note of the central bank’s policy guidance.
At 5:25 a.m. ET, the 10-year Treasury yield was trading at 3.4734% after falling more than 2 basis points. The yield on the two-year Treasury fell less than 2 basis points, to 3.963%.
Yields and prices have an inverted relationship and one basis point is equal to 0.01%.
|specific||a company||fruit||changes||% is changing|
|US1M||US Treasury for one month||4.167%||+0.076||0.00%|
|US3M||US Treasury for 3 months||4.825%||+0.106||0.00%|
|US6M||US Treasury for 6 months||4.947%||+0.044||0.00%|
|US1Y||US Treasury for a year||4.535%||+0.021||0.00%|
|US2Y||US Treasury for two years||3.955%||-0.026||0.00%|
|US10Y||US Treasury for 10 years||3.473%||-0.027||0.00%|
|US30Y||US Treasury for 30 years||3.675%||-0.022||0.00%|
Investors looked at the latest Fed rate news after the central bank announced that it would raise interest rates by 25 basis points on Wednesday. It was the ninth consecutive increase in interest rates and was in line with expectations.
During a press conference following the meeting, Fed Chairman Jerome Powell noted that the central bank’s battle to bring inflation down to 2% “still has a long and potentially bumpy road ahead.” He also indicated that rate cuts for 2023 are unlikely.
However, a pause in rate hikes may be on the horizon, as hinted in a statement released by the Fed alongside the rate announcement, adding that policy decisions will continue to be data-driven.
This was a shift in tone from comments from Fed officials earlier this month that indicated higher-than-expected interest rates. It had led many investors to expect a 50 basis point rate hike, but revised their forecasts after recent turmoil in the banking sector raised concerns about the stability of the financial system.
Powell noted that those concerns played a role in the Fed’s policy decision.
Elsewhere, the Swiss National Bank announced a 50 basis point rate hike on Thursday and the Bank of England is expected to publish its latest policy decision later today.
On the data front, the latest weekly jobless claims report is due out on Thursday as well as final building permits numbers and new home sales data for February.
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