U.S. Treasury yields were lower on Wednesday as investors awaited the Federal Reserve’s first interest rate decision of 2025.
At 4 a.m. ET, the 10-year Treasury yield declined by three basis points to 4.5183%, while the 2-year Treasury yield was down by one basis point to 4.1888%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Treasurys
Investors are keenly anticipating the Fed’s interest rate decision following the central bank’s meeting which took place over Tuesday and Wednesday, and the results of which will be released at 2 p.m. ET.
Expectations for an interest rate cut remain low, with traders pricing in a nearly 100% chance that the Fed will keep rates steady at a target range of 4.25% to 4.50%, according to the CME Group FedWatch Tool.
“When it comes to the Fed, they’re widely not expected to do anything tomorrow and that’s a good thing. The less the Fed has to do, the better it is for the market, in our view,” Bespoke Investment Group co-founder Paul Hickey said Tuesday on CNBC’s “Closing Bell: Overtime.”
The rate decision announcement will be followed by a press conference by Fed Chair Jerome Powell at 2:30 p.m. ET, which investors will watch closely for clues about further monetary policy decisions this year.
President Donald Trump — who Powell has a contentious relationship with, dating back to Trump’s first term — has already said that he will “demand that interest rates drop immediately,” during a speech at the World Economic Forum in Davos, Switzerland last week.
“The Fed must follow its legislative mandate,” former Kansas City Fed President Esther George told CNBC in an interview Friday. “Congress has told us it is to bring prices to a low and stable level. In the long run, this institution has to think about those objectives rather than be swayed by outside commentary and political pressure that will come its way, as it has for its entire existence.”