Treasury yields are keeping stable as investors digest Fed rate determinations

February 3, 2023: On Thursday, U.S. Treasury yields were little changed as investors digested the Federal Reserve’s interest prices decision and assessed the outlook for monetary policy.

The yield on the 10-year Treasury was flat at 3.391%. The 2-year Treasury yield was down two basis points at 4.09%.

Yields and prices have an inverted relationship. One basis point is equivalent to 0.01%.

On Wednesday, the Fed is concluding its first meeting of the year with a 25 basis point rate increase. That marked a slowdown in rate hikes compared to the last increases.

The central bank had hiked prices by 50 basis points at its last meeting in December and posted 75 basis point increases at each of its previous four sessions.

However, the central bank indicated that rates would rise further, reigniting concerns about if the speed of rate surges and keeping rates elevated for longer could pull the U.S. economy into a slump.

The Fed has been hiking interest rates to curb persistently high inflation, which was cooling slightly, it stated.

Several key data releases remain from the week, including the weekly jobless claims report and factory order figures for December and nonfarm payroll data on Friday.

Investors continued to look to earnings season for hints about how significant corporations anticipate the economy to develop and affect them. Apple, Amazon, Ford Motor and Shell are among those reporting on Thursday.