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US bond yields fall before Fed’s policy decision

US bond yields fall before Fed’s policy decision

Mubasher: US debt bond yields dropped on Wednesday, ahead of the outcome of the Federal Reserve’s two-day meeting in which a second interest rate cut is expected, according to CNBC.

By 1:25 pm GMT, the yield on the benchmark 10-year Treasury note, inched down to 1.773%, while the 30-year government bond yield dipped to 2.241%. The 2-year note yield was at 1.694%.

The Fed is due to announce what is widely expected by investors across Wall Street as the second move to cut interest rates this year.

Fixed-income investors expected the short-term lending rate to be slashed by one quarter point to a range between 1.75% and 2%.

However, market participants will be more focused on the Fed’s tone in describing the US economy and growth forecasts for the remaining months of this year.

The US central bank slashed its interest rates last July for the first time since December 2008, with policymakers in favour of the cut pointing to a slowdown of economic activity, “muted inflations” and tensions with the world’s major trade allies.