Treasury Yields Fall to Lowest in Since 2016 on Fed Call
20 June 2019 - 9:12AM
Dow Jones News
By WSJ City
Ten-year Treasury yields fell below 2% for the first time since
late 2016 after the Federal Reserve stood pat on its benchmark rate
but opened the door to a near-term-cut. That's the latest milestone
in this year's global government bond rally that has sent yields in
Europe to a series of record lows.
Interest-rate forecasts released on Wednesday showed eight of 17
officials project the Fed will cut the benchmark federal-funds rate
this year, with seven of those officials seeing two quarter-point
reductions.
"Half the committee is ready to pull the trigger on a rate cut
at some point this year. Powell's tone in his press conference to
me suggested the threshold for a rate cut is not particularly far
away."
Thomas Simons, senior vice president and money-market economist
in the fixed-income group at Jefferies LLC
KEY FACTS
--- The benchmark yield fell as low as 1.981% in Asian trading
versus 2.023% late in the New York day.
--- Treasury prices surged higher after the Fed's signal on
rates.
--- The 10-year yield had been as high as 3.232% on Nov. 8.
--- For most of this year, global bond yields have been falling
and prices have been rising on growth concerns.
--- Yields have hit record lows in a number of European
markets.
Analysis
Fed Chair Jerome Powell did little to alter the impression that
the Fed was prepared to cut interest rates for the first time in
more than a decade. Fed officials in their policy statement made
note of both increased uncertainty about the economic outlook and
muted inflation pressures, while saying they would "act as
appropriate to sustain the expansion."
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
June 20, 2019 03:57 ET (07:57 GMT)
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