U.S. Treasury yields dropped on Wednesday after the Federal Reserve held interest rates steady, as expected, but flagged in its new economic projections that its tightening policy is ending and rate cuts are on the horizon next year.
U.S. benchmark 10-year yields fell to their lowest since August, and were last down 12.7 basis points (bps) at 4.08% .
U.S. two-year yields, which reflect rate expectations, slid to their weakest level since mid-June, last down 18.9 bps at 4.54%.
A near-unanimous 17 of 19 Fed officials project that the policy rate will be lower by the end of 2024 than it is now – with the median projection showing the rate falling three-quarters of a percentage point from the current 5.25%-5.50% range.
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