U.S. Treasury yields were higher on Thursday as investors digested the Federal Reserve’s decision to cut interest rates by 50 basis points on Wednesday.
2:49 am ET, yields on 10 Year Treasury It rose over a basis point to 3.7018%. The 2 Year Treasury The yield was less than a basis point at 3.6127%.
Yield and price have an inverse relationship. A basis point is 0.01%.
The Federal Reserve on Wednesday delivered a 50 basis point interest rate cut, bringing the federal funds rate to 4.75%-5%. The size of the cut was in line with market expectations, which had shifted to a larger 50 basis point after expecting a 25 basis point cut in recent days.
This is the central bank’s first rate cut since it began raising rates in March 2022, marking a shift in its monetary policy approach.
“The panel remains highly confident that inflation is moving steadily toward 2 percent, and risks to achieving its employment and inflation targets are roughly balanced,” the central bank’s post-meeting statement said.
The Fed’s Federal Open Market Committee also indicated through its “dot plot” that it expects another 50 basis points worth of cuts by the end of 2024. point in 2026.
Elsewhere, the Bank of England is set to announce its latest interest rate decision. After cutting rates for the first time in four years in August, rates are widely expected to hold steady.
Back in the U.S., investors are eyeing current home sales data for August and the latest weekly initial jobless claims figures.
