Treasuries Are Mixed on Quarter-Point Rate Cut
The FOMC's decision to cut the funds rate target by 25 basis points met the expectations of about half the market and disappointed the rest, as evidenced by the wild swings in treasury prices following the announcement. While the short-end was unambiguously hurt by the Fed's shift to a less aggressive easing path, with the new 2-year giving up more than 11 basis points as its yield surged to over 4.10%, the long end's path was not so direct. The 30-year bond surged nearly a point just after the FOMC's statement, fell back toward unchanged, then rebounded back near the highs before closing up about a half point.
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