US Treasury rates ahead of the Fed’s rate decision
US Treasury yields fell on Wednesday as investors awaited the Federal Reserve’s latest interest rate decision and guidance on the central bank’s monetary policy path.
At 5:48 a.m. ET, the 10-year Treasury yield was down 2 basis points at 3.587%. The 2-year Treasury traded at 4.134% after falling about 4 basis points.
Yields and prices move in opposite directions. One basis point corresponds to 0.01%.
Treasurys
| TICKER | COMPANY | DIVIDEND | CHANGE | %CHANGE |
|---|---|---|---|---|
| US1M | US 1 month Treasury | 4.045% | +0.073 | 0.00% |
| US3M | US three-month Treasury | 4.75% | -0.003 | 0.00% |
| US6M | US 6-Month Treasury | 4.94% | +0.016 | 0.00% |
| US1Y | US 1 Year Treasury | 4.642% | -0.016 | 0.00% |
| US2Y | US 2-year Treasury | 4.189% | +0.012 | 0.00% |
| US10Y | US 10-year Treasury | 3.611% | +0.005 | 0.00% |
| US30Y | US 30 year treasury | 3.749% | +0.013 | 0.00% |
Investors were preparing for the Fed’s next interest rate decision, which is expected to be announced after the central bank’s policy meeting ends on Wednesday.
An increase of 25 basis points is widely expected. It would be the ninth consecutive rate hike and the second quarter-point hike in a row after a series of major rate hikes were implemented through 2022.
Just a few weeks ago, many investors believed that Fed officials would accelerate the pace of rate hikes and announce a 50 basis point increase. Fed Chairman Jerome Powell had hinted that interest rates would go higher than previously expected and indicated that the Fed’s efforts to cool the economy were still ongoing.
However, the recent turmoil in the banking sector following the failures of Silicon Valley Bank and Signature Bank as well as Credit Suisse’s takeover of UBS changed investor sentiment. Many now believe that the Fed will favor stability and therefore choose a smaller interest rate increase.
Investors will also look for guidance on future policy plans, particularly on interest rate cuts and their timing.
Meanwhile, concerns about the banking sector appear to be easing slightly, with the SPDR Regional Banking ETF (KRE) closing higher for a second day in a row on Tuesday.
