U.S. 10-Year Yield Falls Ahead of Treasury Bills Buying
The US 10-year Treasury yield fell to around 4.12% following the Federal Reserve’s 25 basis point interest rate cut on Wednesday, the third and last dovish policy for 2025.
Yields declined as market react to the monetary authority policy tightening out next year, in contrast to initial expectations before Fed decision.
Federal Reserve Chair Jerome Powell’s acknowledgement of a softer labor market quickly put a bid into bonds, reversing the initial selloff of U.S. Treasury and steepening the yield curve.
Fed signalled a less hawkish stance than markets anticipated, with Powell suggesting a rate hike is off the table, prompting traders to price in two additional cuts in 2026.
The central bank said it will begin buying short-dated Treasury bills to support market liquidity from December 12, with the initial round totalling about $40 billion.
The Federal Reserve now foresees 2.3% growth in 2026, up from 1.8% in September, and 2% in 2027, slightly above prior forecasts. Inflation forecasts were lowered to 2.5% for 2025 and 2.4% for 2026, remaining modestly above the 2% target.
The US central bank said it will start buying $40 billion in Treasury bills on Friday. Purchases are expected to remain elevated for a few months before they are significantly reduced.
Elsewhere, the U.S. dollar fell against its major counterparts in the New York session on Wednesday, as the Federal Reserve lowered interest rates by 25 basis points. #U.S. 10-Year Yield Falls Ahead of Treasury Bills Buying FCMB Group Forecasts N62.55 billion Profit for Q1-2026
