Markets just erased a trillion while long yields hit 19 year highs.
30-year Treasury yield hits highest level since 2007 after Fed keeps rates unchanged
Yields on longer-dated U.S. Treasurys rose on Wednesday, as traders weighed whether the Federal Reserve can keep inflation at bay following its latest monetary policy decision.
The 30-year Treasury bond yield jumped 10.5 basis points to 5.201%. It also hit its highest level since July 2007 at 5.244%. The benchmark 10-year note yield also climbed nearly 7 basis points to 4.671%.
Shorter-dated Treasurys rose, pushing yields lower. The 2-year yield traded 4 basis points lower at 4.236%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
Stocks tumbled for a myriad of reasons Wednesday, but mostly because the bond market signaled the Federal Reserve could be falling behind on the inflation fight as the central bank chose to keep interest rates unchanged.
The Dow Jones Industrial Average closed 1,153.18 points lower, or 2.19%, at 51,594.14 for its worst decline since April 2025. The S&P 500 slid 1.52% to end the day at 7,316.15. The Nasdaq Composite fell 1.74% to 24,442.94, ending the session more than 10% off its all-time high.
The Fed kept to the sidelines in its latest rate decision, and the bond market responded with the 10-year Treasury yield jumping 7 basis points to above 4.67%. The 30-year Treasury yield soared 10 basis points to above 5.2%, hitting its highest level since 2007.
Three officials wanted a hike, but the Fed still stood pat on rates. And Fed Chairman Kevin Warsh’s tough talk failed to convince the bond market.
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