US bond yields fell on Wednesday after Federal Reserve officials reaffirmed their expectation of two interest rate cuts later this year, aligning with market forecasts.
Following the Fed’s policy decision, the two-year Treasury yield dropped 5 basis points to 3.90 per cent. Yields across maturities slipped by 1 to 5 basis points, with the largest declines in shorter-term debt. The central bank left its benchmark rate unchanged at 4.25–4.5 per cent and retained projections for two 25 basis point cuts before year-end.
Futures traders are pricing in around 48 basis points of easing, which implies nearly two full cuts, with the first move fully expected by October. Some see a possible cut as early as September.
