Longer-dated US yields rise after Fed holds rates and raises economic assessment
TLT•Longer-dated US Treasury yields rose after the Federal Reserve held its benchmark rate at 3.75%-4.00% and upgraded its economic assessment to “strong.” Futures priced in an 82% chance of a quarter-point rate hike in December, up from about 75% earlier in the day.
1. Yields rise after Fed decision
The 10-year Treasury yield rose 4.3 basis points to 5.036%, and the 30-year yield gained 5.8 basis points to 5.363%. The two-year yield fell 2.5 basis points to 4.712%, while the gap between two- and 10-year yields widened to 32 basis points from about 25 basis points late Tuesday.
2. Fed holds rates steady
In a 10-2 decision, the Fed kept its benchmark rate in a 3.75%-4.00% range and upgraded its economic assessment from “solid” to “strong.” Lisa Cook and Beth Hammack dissented in favor of a quarter-point rate hike.
3. December hike expectations
Rate futures priced in about an 82% chance of a quarter-point hike at the Fed’s December meeting, compared with roughly 75% earlier in the day. The Fed said it would wait for further inflation data; September’s Personal Consumption Expenditures report was due Thursday.
