U.S. Government-Bond Yields Fall as Fed Leaves Benchmark Interest Rate Unchanged
29 Enero 2020 - 1:55PM
Noticias Dow Jones
By Sam Goldfarb
U.S. government-bond prices held gains Wednesday after the
Federal Reserve left eft its benchmark interest rate unchanged at
the conclusion of its two-day policy meeting.
In recent trading, the yield on the benchmark 10-year U.S.
Treasury note was 1.617%, according to Tradeweb, essentially
unchanged from just before the Fed's policy statement but down from
1.642% Tuesday.
Yields, which fall when bond prices rise, have declined in
recent days in response to speculation that China's coronavirus
outbreak could hurt the global economy and push the Fed to lower
short-term interest rates.
Though the Fed was expected to keep rates unchanged Wednesday,
federal-funds futures -- which investors use to bet on the path of
central-bank policy -- showed earlier in the day that investors
thought there was a 57% chance that the Fed will cut rates by the
end of its September meeting, according to CME Group data. That was
up from 46% a week ago and 38% a month ago.
Expectations for lower interest rates set by the Fed tend to
increase demand for shorter-term Treasurys by making their yields
look more attractive by comparison. Growth fears, meanwhile, also
boost longer-term Treasurys by increasing the appeal of safer
assets and lowering expectations for inflation.
In recent trading, the yield on the two-year Treasury note was
1.445%. That was down from 1.457% Tuesday and 1.569% on Jan. 17,
the last trading session before Chinese health officials said the
coronavirus was spreading among humans.
As if midnight Tuesday, the virus had killed more than 130
people while infecting more than 6,000, most of them in China. On
Wednesday, British Airways said it was canceling all flights to
mainland China, while American Airlines said it would suspend
flights from Los Angeles to Shanghai and Beijing.
The Fed cut rates three times last year, lowering their
benchmark federal-funds rate to a range between 1.5% and 1.75%,
after raising it four times in 2018.
Write to Sam Goldfarb at sam.goldfarb@wsj.com
(END) Dow Jones Newswires
January 29, 2020 14:40 ET (19:40 GMT)
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