Treasurys rally after the Fed says it could begin unwinding its balance sheet 'relatively soon'
Thomson Reuters
The decision to keep the fed funds rate in a range between 1% and 1.25% was widely anticipated as Bloomberg's World Interest Rate Probability data showed a 0% chance the Fed would hike.
However, many on Wall Street were expecting some hints as to when the unwind might begin. And they got a little bit of clarity with the Fed saying, "The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated."
Buying across the Treasury complex is having the biggest impact on yields in the belly of the curve, which are down close to 6 basis points a piece. Here's a look at the scoreboard as of 2:30 p.m. ET:
- 2-year -4bps @ 1.355%
- 3-year -5.1bps @ 1.505%
- 5-year -5.7bps @ 1.833%
- 7-year -5.1bps @ 2.097%
- 10-year -4.3bps @ 2.293%
- 30-year -1.4bps @ 2.903%
Wednesday's bid has pushed the benchmark 10-year yield back below the 2.30% threshold after it failed a test of the early-July highs near 2.35%. Traders will now be focusing on some near-term support near 2.25%. A breakdown of that level sets up the possibility of a retest of the key 2.15% level.
Curve steepening has taken hold with the 5-30-year spread widening to 107 bps. It's now at its steepest level in about six weeks.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas