After the Federal Reserve raised interest rates for the first time since 2023 and is expected to take further action to contain inflation, short-term treasury bond yields rose sharply. The 2-year US Treasury yield once rose to 4.73%, the highest since 2024, and more than 10 basis points above pre-meeting levels. The increase in long-term US bonds lagged behind, and the 10-year yield maintained a downward trend at 4.97%. The interest rate hike itself has been widely anticipated by the market. Investors' attention is mainly focused on quarterly economic forecasts. The latter shows that more policymakers support further tightening of policies. Traders have increased their bets on the Federal Reserve's interest rate hike again this year, and have almost completely absorbed expectations of three interest rate hikes by mid-2027. Ed Hutchings, head of interest rates at Aviva Investors, said: “Further interest rate hikes should clearly be on the Fed's agenda. As far as the Fed's mission to maintain price stability is concerned, the outlook for inflation remains a major concern.”

After the Federal Reserve raised interest rates for the first time since 2023 and is expected to take further action to contain inflation, short-term treasury bond yields rose sharply. The 2-year US Treasury yield once rose to 4.73%, the highest since 2024, and more than 10 basis points above pre-meeting levels. The increase in long-term US bonds lagged behind, and the 10-year yield maintained a downward trend at 4.97%. The interest rate hike itself has been widely anticipated by the market. Investors' attention is mainly focused on quarterly economic forecasts. The latter shows that more policymakers support further tightening of policies. Traders have increased their bets on the Federal Reserve's interest rate hike again this year, and have almost completely absorbed expectations of three interest rate hikes by mid-2027. Ed Hutchings, head of interest rates at Aviva Investors, said: “Further interest rate hikes should clearly be on the Fed's agenda. As far as the Fed's mission to maintain price stability is concerned, the outlook for inflation remains a major concern.”