The 10-year U.S. Treasury yield slumped to a one-month low Thursday as investors digested the latest interest rate decision from the Federal Reserve and clues about the path ahead for rate cuts.
The benchmark rate down by more than 10 basis points at 3.86%, pulling further below the key 4% level breached Wednesday. The 2-year Treasury was last 2.9 basis points lower at 4.20%.
Yields and prices move in opposite directions and one basis point equals 0.01%.
The Fed kept interest rates unchanged Wednesday. However, Fed Chairman Jerome Powell said it was unlikely that rates would be cut at the next Fed meeting in March. To be sure, he also noted rate cuts could take place later this year.
The Fed’s policy statement, which was released alongside the rate decision, also indicated that further rate hikes would no longer be on the table. That marked a change from the Fed’s last policy meeting in December.
Elsewhere, the Bank of England left interest rates unchanged in a largely expected move. The Monetary Policy Committee voted 6-3 to hold rates steady, with two voting members voting in favor of a 25 basis point increase as well as one vote for a quarter-point cut.
Investors also parsed fresh ISM manufacturing index data that showed U.S. assembling remained in contraction last month. The index notched a reading of 49.1 in January, slightly above a Dow Jones estimate of 47.2.
