Treasury yields rise as investors look to Fed rate decision

The yield on the 10-year Treasury note rose Wednesday as Wall Street assessed the first rate cut in four years from the Federal Reserve and its implications for the economy.

The 10-year Treasury was up 5 basis points to 3.696%. The 2-year Treasury yield added nearly 3 basis points to 3.619%.

Yields and prices move in opposite directions. One basis point equals 0.01%.

The Fed implemented its first rate cut since the early Covid pandemic Wednesday, slashing interest rates by a half percentage point. The move marked a turning point after one of the most aggressive hiking cycles for the central bank in recent history.

"The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance," the statement said.

Uncertainty lingered over the magnitude of a cut in the lead-up to the decision. A quarter-point cut was widely expected until recent days when investors began pricing in a higher probability of a bigger half point reduction.

The committee also offered clues into further rate moves, with its updated "dot plot" projections suggesting 50 more basis points of cuts before the end of the year. The committee also anticipates a full percentage of cuts by the end of next year and a half-point in 2026.

Investors will search for further insight on monetary policy when Fed Chair Jerome Powell speaks in a post-meeting press conference.