U.S. Treasury yields were little changed Wednesday after the Federal Reserve announced its decision to hold rates near zero.
The yield on the benchmark 10-year Treasury note rose 2 basis points to 1.261% at 2:50 p.m. ET. The yield on the 30-year Treasury bond added 2 basis points, advancing to 1.912%. Yields move inversely to prices and 1 basis point equals 0.01 percentage points.
The Federal Reserve concluded its two-day meeting of the Federal Open Market Committee Wednesday by keeping interest rates in a target range near zero, as expected.
Fed Chairman Jerome Powell said in a press conference that even though the committee is making progress on its policy goals, it has a ways to go before it adjusts policy.
While reiterated several times that “we’re on a very clear path to a strong job market,” he also maintained “we have some ground to cover on the labor market side. I think we’re some way away from having had substantial further progress toward the maximum employment goal.”
Scott Ruesterholz, a portfolio manager at Insight Investment, said that while the delta variant is unlikely to see new lockdowns implemented in the U.S. given the level of vaccinations, it may slow economic growth.
“This development likely strengthens the hand of the doves on the FOMC who do not want to remove policy accommodation prematurely,” he explained.
Ruesterholz said his firm continued to expect the Fed’s Jackson Hole summit to be a more “natural point” to start formally discussing tapering.
Thanos Bardas, the co-head of investment grade fixed income at Neuberger Berman, said of all the meetings left for the year, he expected the “least amount of fireworks” from this one.
Auctions are scheduled to be held on Wednesday for $30 billion of 119-day bills and $28 billion of 2-year floating-rate notes.
— CNBC’s Patti Domm and Jesse Pound contributed to this market report.
