Treasuries Close Roughly Flat After Late-Day Pullback

(RTTNews) - After turning in a strong performance throughout much of the trading day on Wednesday, treasuries came under pressure late in the session.

Bond prices pulled back well off their highs of the session, ending the day roughly flat. The yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 5.010 percent after hitting a low of 4.940 percent.

The late-day weakness among treasuries came after the Federal Reserve announced its widely expected decision to raise interest rates for the first time since July 2023.

The Fed said it decided to raise the target range for the federal funds rate by 25 basis points to 3.75 to 4 percent in support of its dual mandate.

In the accompanying statement, the Fed noted that inflation remains elevated and argued today's rate hike will support a timelier return to the central bank's 2 percent goal.

Along with the announcement of the Fed's latest monetary policy decision, officials also provided their latest projections for the economy and interest rates.

The projections show that a majority of Fed officials expect rates to be above 4 percent by the end of 2026, suggesting at least one more rate hike this year.

Selling pressure picked up as Fed Chair Kevin Warsh delivered his post-meeting press conference, with the central bank chief highlighting persistent inflation.

"Our predominant focus is on the price stability side of our mandate. The plain fact is that inflation is too high, and has been for too long," Warsh said. "This summer's inflation readings do not tell me that underlying trends have meaningfully improved."

Earlier in the day, treasuries benefitted from bargain hunting after the ten-year yield reached its highest level since July 2007 in the previous session.

The rebound by treasuries also came amid a sharp pullback by crude oil prices, with U.S. crude oil futures tumbling by more than 3 percent after soaring by almost 6 percent over the past two days.