Treasurys Drift Lower as Fed Dust Settles; Jitters About When Fed Might Raise Rates Calmed a Bit
U.S. Treasury prices trickled lower Thursday as nervousness about when the Federal Reserve might raise rates settled down a bit.</br></br>After suffering a sharp selloff Wednesday on the back of the Fed's policy announcement, Treasurys wobbled between minor gains and losses most of the session. The ten-year note traded down 1/32 in price by late afternoon to yield 2.775%, according to Tradeweb. The 30-year slipped 8/32 to yield 3.665%, while the two-year held flat to yield 0.428%. Bond yields move inversely to prices.</br></br>The session's ups and downs reflected buying from bargain hunters who took advantage of Wednesday's sharp price drop, offset by sellers facing the newfound fear of a potential Fed rate increase on the horizon.</br></br>"There's been a shift in the Fed's thinking," said Tom di Galoma, head of fixed income rates at ED&F Man Capital. "They're beginning to say we have to address raising rates."</br></br>The Fed's policy update Wednesday rattled bond investors after the committee's rate projections showed some officials shifting forward their forecast for higher rates. Comments from Fed Chairwoman Janet Yellen exacerbated those concerns after she said a rate increase could happen around six months after the central bank is done buying bonds.