U.S. Treasury Yields Rise After Fed's Interest Rate Cut

U.S. Treasury yields rose on Thursday as investors assessed the Federal Reserve’s recent interest rate cut.

The Fed lowered rates by 50 basis points on Wednesday, bringing the federal funds rate to 4.75%-5%. This marked the first cut since the central bank began raising rates in March 2022, signaling a shift in its monetary policy.

As of Thursday morning, the yield on the 10-year Treasury was slightly higher at 3.7018%, while the 2-year yield ticked up to 3.6127%. Treasury yields rise as prices fall, and one basis point equals 0.01%.

The Fed's decision came as inflation appears to be moving closer to the 2% target. The central bank also indicated through its "dot plot" that it expects additional rate cuts, projecting another 50 basis points of cuts by the end of 2024 and further reductions in 2025 and 2026.