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Yields of the key US 10-year benchmark dropped to test fresh multi-day lows in sub-3.07% levels after the Federal Reserve lifted the Fed Funds target range to 2.00%-2.25% at today’s meeting, broadly in line with market expectations. The move reverted yesterday’s climb to fresh tops above the 3.11% area.

Yields extended the drop despite the somewhat hawkish message from the Committee, after 12 out of 16 members now favour a fourth rate hike in the next months. The Fed’s statement also removed the ‘accommodative’ mention regarding monetary policy. It is worth mentioning that today’s decision was unanimous.

The Committee reiterated that risks to the economy appear ‘roughly balanced’ and that the gradual tightening of the monetary conditions is conditioned to a robust labour market, inflation close to the Fed’s target and sustained economic expansion.