The yield on the 10-year Treasury note rose Wednesday as Wall Street assessed the first rate cut in four years from the Federal Reserve and its implications for the economy.
The 10-year Treasury was up 6 basis points to 3.702%. The 2-year Treasury yield added more than 2 basis points to 3.617%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
"The long end of the bond market doesn't want the Fed to be easing aggressively because they're worried about inflation," DoubleLine's Jeffrey Gundlach told CNBC's "Closing Bell" on Wednesday. "Rates have come down a lot this year on the short end, not very much on the long end."
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The Fed implemented its first rate cut since the early Covid pandemic Wednesday, slashing interest rates by a half percentage point. The move marked a turning point after one of the most aggressive hiking cycles for the central bank in recent history.
"The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance," the statement said.
Uncertainty lingered over the magnitude of a cut in the lead-up to the decision. A quarter-point cut was widely expected until recent days when investors began pricing in a higher probability of a bigger half-point reduction.
Money Report
The committee also offered clues into further rate moves, with its updated "dot plot" projections suggesting 50 more basis points of cuts before the end of the year. The committee also anticipates a full percentage of cuts by the end of next year and a half-point in 2026.
Wall Street also parsed Chair Jerome Powell's news conference following the meeting for greater insight into upcoming rate decisions. He indicated that the central back may not take an as aggressive stance going forward and would "go carefully meeting by meeting."
