The yield on the 2-year Treasury note rose on Thursday as investors digested the Federal Reserve’s latest guidance on the potential path ahead for interest rate cuts.
The 2-year Treasury yield added about 4 basis points to 4.645%. The yield on the 10-year Treasury was last flat at 4.271%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
The central bank left rates unchanged at the conclusion of its March policy meeting, but signaled that it anticipates cutting three times this year. However, policymakers failed to offer hints about when the rate cuts may come.
In a press conference following the decision, Fed Chairman Jerome Powell said that he expects interest rates to ease as long as it’s supported by the economic data.
“We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” he said.
The so-called dot plot, which reflects projections from Fed officials, also showed that policymakers are expecting three rate cuts for 2025, one less than provided in December. Traders are currently pricing in a 67% chance of a cut in June, according to CME Group’s FedWatch tool.
