Traders work on the floor of the New York Stock Exchange on Feb. 13, 2025
U.S. Treasury yields dipped on Thursday as investors weighed the state of the U.S. economy a day after the Federal Reserve held interest rates steady.
The benchmark 10-year Treasury note yield slipped more than 1 basis point to 4.237%, and the 2-year Treasury yield was more than 1 basis point lower at 3.962%.
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WATCH HEREOne basis point is equal to 0.01%. Yields and prices move in opposite directions.
In a widely expected move on Wednesday, the Federal Open Market Committee kept its key borrowing rate targeted in a range between 4.25% and 4.5%.
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Fed officials also outlined their rate projections for the year, saying they will see another half-percentage point of total rate cuts in 2025. The Fed typically moves in quarter-percentage-point increments, meaning this could translate into two reductions this year.
Federal Reserve Chair Jerome Powell said during a press conference following the decision that the central bank would keep interest rates elevated if required.
"If the economy remains strong, and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer," he said. "If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can ease policy accordingly."
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The Fed's announcement came as investors are increasingly concerned about a slowing U.S. economy, due to the effect of U.S. President Donald Trump's trade policies, particularly implementing tariffs on global trade partners. This has raised alarm bells about the possibility of a recession.
Powell noted that the arrival of tariffs has put upward pressure on inflation expectations.
"I do think with the arrival of the tariff inflation, further progress may be delayed," he said.
