U.S. Government Bonds Rally After Fed Minutes; Yield on Benchmark 10-Year Note Hits Lowest level in More Than a Year
Treasury bonds rallied Wednesday, sending the benchmark 10-year note's yield to its lowest in more than a year, as the minutes for the Federal Reserve's September policy meeting reassured investors that the central bank would be in no rush to raise interest rates.</br></br>The 10-year note's yield fell to 2.331%, the lowest closing level since June 2013. The previous low of 2014 was 2.334% made on Aug. 28. Yields fall as prices rise.</br></br>Yields on shorter-dated notes dropped at a sharper pace after the minutes as they are directly affected by the Fed's official interest-rate outlook. Longer-dated bonds are more affected by inflation, which chips away at investors' fixed returns over time.</br></br>The yield on the two-year note fell to 0.46%, the lowest closing since Aug 19. The yield has tumbled after last month rising to near 0.6%, the highest level since 2011.</br></br>Wednesday's price rally is the latest chapter in a yearlong flight to safe assets that underscores anxiety over the global economic outlook. A broad selloff in commodities over the past few months has heightened concern over demand from once-robust China, while the eurozone is teetering on the edge of a recession and Japan's economy has failed to break out of its decadelong stagnation.