U.S. government debt yields fell Thursday after the Federal Reserve in the prior session failed to signal further rate cuts in 2019, disappointing some investors who’d been hoping for hints at looser monetary policy.
The fixed income moves came after the Fed cut the benchmark overnight lending rate by 25 basis points on Wednesday, its second such move in 2019. However, the central bank dampened market expectations by steering clear of signalling further rate cuts this year.
Following its two-day policy meeting, the central bank said it would lower its benchmark overnight lending rate to a target range of 1.75% to 2%.
If I/R falls (expansionary monetary policy), T bonds yield will seems more attractive. More investors into T bonds, T Bonds price goes up, which causes T bond yields to decrease.
-Peronal Recap end-