10year yield drops as investors rush for safety
The yield on the benchmark 10-year Treasury note dropped the most in six months on Thursday as investors fled equities for the safety of bonds in the wake of a sell-off in technology stocks. The Federal Reserve's updated outlook on Wednesday calling for just three hikes in their short-term benchmark rate this year, also caused investors to bet on lower rates in the bond market.
The 10-year yield fell 7.8 basis points to 2.82 percent, its biggest one-day decline since September 2017. The yield briefly jumped above 2.9 percent on Wednesday immediately following the Federal Reserve's rate decision. Bond yields move inversely to prices.
Dow Jones industrial average futures fell more than 300 points before the open.
On Wednesday, the U.S. Fed raised interest rates by 25 basis points as expected, and upgraded its economic outlook, saying that the economy and job gains had been strong in recent months.
But the Fed kept its rate outlook of three hikes for 2018 the same and traders seem to be focusing on that as reason to bet the central bank will use caution before hiking further.
Following the announcement, the first under new chairman Jerome Powell, Treasury yields rose with the benchmark 10-year yield briefly topping 2.9 percent, before paring some gains.Read More...