On Wednesday, the 10-year U.S. Treasury experienced a decline as investors analyzed the Federal Reserve’s recent interest rate determination and its strategy to implement three easing measures by year-end.
The 10-year Treasury yield decreased by almost 2 basis points to reach 4.281%, while the 2-year Treasury yield saw a more significant drop of over 7 basis points, settling at 4.617%.
It’s important to note that yields and prices exhibit an inverse relationship, and each basis point change is equivalent to 0.01%.
On Wednesday afternoon, the central bank opted to maintain benchmark interest rates at their current levels and upheld the earlier projection for three reductions in 2024.
Nonetheless, policymakers emphasized that these cuts won’t materialize until the Fed is more assured that inflation is receding towards its 2% objective.
“We might be edging closer to the inaugural interest rate cut, but the sentiment doesn’t quite align,” remarked Greg McBride, chief financial analyst at Bankrate. “Interest rates surged upward rapidly, but the descent will likely be more gradual.”
