US Treasury Yields Rise on Fed’S Policy Outlook

US Treasury yields saw a significant uptick on Thursday, driven by the Federal Reserve’s interest rate decision released on Wednesday and a speech by Federal Open Market Committee Chairman Jerome Powell during the subsequent press conference.

The yield on the 10-year US Treasury note climbed to 4.577%, up from the previous day’s close of 4.519%. During the session, yields had touched a low of 4.505%, compared to the previous low of 4.598%.

A discrepancy emerged between the Federal Open Market Committee’s statement released on Wednesday after the 25 basis point rate cut, which aligned with market expectations, and the statement issued by the meeting.

The key difference between the two statements lies in the fact that the latest version hinted at the size and timing of future policy moves, sparking market speculation that interest rates might remain unchanged at the next meeting.

The Fed’s statement read, “In support of these goals, the Committee decided to reduce the target range for the federal funds rate by 25 basis points to 4-1/4 to 4-1/2 percent. In determining the pace of future adjustments to the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic developments. The Committee will continue to assess the implications of incoming information for the economic outlook and the balance of risks.