US 10-year treasury yield drops below 2%

  • The US 10-year bond yield hits lowest since November 2016. 
  • Fed kept rates unchanged but signaled readiness to act, if required. 

The yield on the 10-year US Treasury note fell below 2% soon before press time to hit the lowest level since November 2016. 

The four basis point drops could be associated with the US Federal Reserve's decision to keep rates steady but signal a shift to a more dovish stance. On Wednesday, the US central bank pointed to possible interest rate cuts in the future, citing rising “uncertainties” about the economic outlook.

The Fed said it would “act as appropriate to sustain the expansion” and would “closely monitor the implications of incoming information for the economic outlook”.

Chairman Powell, while speaking at the policy presser, said that the case for additional accommodation and uncertainty surrounding the baseline outlook have increased since the last meeting. 

The dot plots showed the Fed is unlikely to cut rates this year. Even so, the yields are on the retreat and the money markets have priced in 100% probability of a rate cut in July. It appears the Fed's decision to remove the word "patience" from the forward guidance on interest rates has been taken a sign the bank is ready to act if necessary. 

As of writing, the yield is trading at 2% – down 18 basis points on a month-to-date basis and 81 basis points on a year-to-date basis. 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

AUD/USD regains 0.73 on Biden transition news, mixed Aussie trade data

AUD/USD keeps its range around 0.7300 amid mixed Australian trade data and the upbeat market mood. The risk sentiment got a boost following reports that the US GSA has started the formal Biden transition process. S&P 500 futures rise 0.50%. RBA Debelle's speech awaited. 


Gold in bearish consolidation below $1840, remains vulnerable

Gold (XAU/USD) is nursing losses in Tuesday’s Asian trading, having slumped 2% on Monday to reach the lowest levels in four months at $1831. Vaccine progress, stronger US data hammer gold prices. Focus on vaccine updates and risk sentiment for fresh impetus.

Gold news

USD/JPY: Rises for third day on Biden transition news, eyes BOJ’s Kuroda

USD/JPY trims early-Asian losses as Tokyo open welcomes the risk-on mood. Trump concedes defeat, ex-Fed Chair Yellen likely be the next Treasury Secretary. Vaccine hopes, stimulus expectations and Brexit optimism favor bulls.


Bitcoin risks a correction to $12,000

Peter Brandt, author, and publisher of the Factor Report, has exited around 50% of his Bitcoin position. The veteran trader believes Bitcoin might be poised for a correction to $12,000 in the near future.

Read more

Black Friday 2020 Discounts!

Learn to trade with the best! Don't miss the most experienced traders and speakers in FXStreet Premium webinars. Also if you are a Premium member you can get real-time FXS Signals and receive daily market analysis with the best forex insights!

More info