Federal Reserve Maintains Interest Rates Despite Political Pressure

In a move that surprised few but disappointed some, the Federal Reserve's Federal Open Market Committee (FOMC) announced its decision to keep interest rates unchanged at 4.25%–4.5%. This decision comes despite notable pressure from US President Donald Trump to lower the rates, sparking a significant reaction in the Treasury yields.

Market Reactions to the Fed's Decision

The immediate aftermath of the Fed's announcement saw Treasury yields climbing. The yield on the 30-year Treasury bond rose by 5.5 basis points to 4.915%, closely followed by the 10-year note, which climbed by 5.3 basis points to 4.379%. Not to be left out, the two-year note increased by 5.7 basis points to 3.932%, illustrating the market's swift response to the Fed's stance.

Bond Futures Experience a Downturn

Conversely, bond futures for September, which move inversely to yields, observed a decrease. The two-year note slipped by 0.09%, the 10-year bond was down by 0.29%, and the 30-year note declined by 0.74%, marking a notable shift in the bond market's dynamics following the Fed's decision.