U.S. government saw subdued price movement on Wednesday but ended almost unchanged, leaving yields mostly steady after the Federal Reserve emphasized increasing inflation expectations and did not take a step to cool down speculation that it will tighten monetary policy when it convenes in March.
U.S. yields initially rallied after the Fed published its policy statement, then retreated. The two-year note yield, the most reactive to shifts in monetary policy outlook, increased just 0.18 bps to 2.142 percent. The 10-year Treasury note yield was little moved on the day at 2.722 percent after earlier testing levels last observed April 2014.
However, the yield on 30-year bond fell 0.37 bps to 2.944 percent. All three maturities posted the biggest monthly yield increase since November 2016.
In the last meeting under Federal Chairwoman Janet Yellen, who will be succeeded by Jerome Powell on February, the U.S. central bank indicated it is on track to hike rates at its next meeting in March after the rate-setting committee voted unanimously to keep the federal-funds rate unchanged in a range of 1.25 percent to 1.5 percent. The policy statement was perceived as relatively hawkish, stating that inflation would gather steam in the coming months.
The material has been provided by InstaForex Company – www.instaforex.com