Home Interest rate Treasury yields fall, but hold at multi-year highs ahead of expected Fed interest rate hike

Treasury yields fall, but hold at multi-year highs ahead of expected Fed interest rate hike

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Yields on 2-, 10- and 30-year Treasuries fell early Wednesday but remained at multi-year highs ahead of an expected 75 basis point interest rate hike by the Federal Reserve.

What Do Yields Do
  • The yield of the 2-year Treasury bills TMUBMUSD02Y,
    3.327%
    fell 6 basis points to 3.364%, after climbing 15.6 basis points to 3.435% on Tuesday afternoon, marking the highest level since Nov. 14, 2007, according to Dow Jones Market Data. Wednesday’s drop also follows the largest eight-day yield rise for the 2-year note since Aug. 14, 1989.

  • The yield of the 10-year Treasury note TMUBMUSD10Y,
    3.391%
    fell 5 basis points to 3.428% after climbing 11.1 basis points to 3.482% on Tuesday, which marked the highest level since April 14, 2011. On Tuesday, the yield also saw its biggest rise over five days since October 14, 2008.

  • The yield of the 30-year Treasury note TMUBMUSD30Y,
    3.373%
    fell 3 basis points to 3.395%, after climbing 6.4 basis points to 3.432% on Tuesday, the highest since Nov. 2, 2018.

What is driving the market?

Treasuries sold off aggressively on Tuesday as markets now widely expect an interest rate hike of 75 basis points, or three-quarters of a percentage point, from the Federal Reserve when his decision will be announced later on Wednesday. The magnitude of such an increase would be the largest in nearly 30 years.