Yield on 10-year Treasury hovers below 5% as investors await Fed decision - CNBC
The 10-year Treasury yield surpassed 5% following a Federal Reserve rate hike, driven by concerns over persistent inflation and rising oil prices from the U.S.-Iran war. The Fed increased its overnight lending rate, with Chairman Kevin Warsh emphasizing that inflation remains too high despite expectations for a less aggressive tightening cycle. Goldman Sachs analysts anticipate one more hike this year.
Why it matters
This impacts borrowing costs for consumers and businesses, signals the Fed's stance on inflation, and reflects broader economic stability, influencing investment decisions and market sentiment.
The 10-year Treasury note yield moved above the key 5% mark after a Federal Reserve rate increase and comments from Chairman Kevin Warsh highlighting persistent inflation risks.
The benchmark yield was up 2 basis points at 5.016%. The 2-year Treasury note yield was last higher by more than 7 basis points at 4.738%, erasing an earlier decline.
One basis point equals 0.01%, and yields and prices move in opposite directions.
The Fed hiked rates for the first time in three years. Its overnight lending rate now sits in a 3.75%-4% range, up from 3.5%-3.75%.
"Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal," the Fed's policymaking committee said in a statement .
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