- The Federal Reserve raised its benchmark interest rate as expected on Wednesday, marking a sharp policy turnaround for an economy increasingly shaped by the war in the Middle East.
- This is the first rate hike since 2023 and is designed to cool spending and prevent inflation from becoming more entrenched. But it also means higher borrowing costs for Americans already struggling to afford homes, cars, and other big-ticket purchases.
Stocks fell, with the Dow seeing its worst day in nearly a month, while the 10-year Treasury yield moved back to its highest level since 2007 as markets digested Fed Chairman Kevin Warsh’s remarks.
Tag: Dow
Bond limbo: How low can rates go? | Cnn Money.com
Investors are running away from stocks as fast as they can.The Dow plunged more than 350 points shortly after the opening bell Wednesday while the S&P 500 and Nasdaq each dropped more than 2%. Stocks rebounded later in the morning but the sell-off worsened as the day wore on. The Dow was down more than 400 points by mid-afternoon. Strangely enough though, it seems that investors are still bullish on America in spite of the market volatility. They are doubling down their bets on U.S. Treasury bonds.
The rate on a 10 Year Treasury plunged Wednesday morning to 1.86% — its lowest level since May 2013. Yields fall when investors are buying bonds. The yield moved back above 2% later on during the day. So rates still have a relatively long way to go before they approach their all-time low of 1.39% from July 2012.
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