10-year Treasury yield above 4.5% following signals from the Fed’s rate-cutting cycle

The 10-year US Treasury yield rose Thursday after the Federal Reserve signaled fewer rate cuts could be on the horizon next year.

The dividend on 10-year treasury rose over a basis point to 4.516%, after surpassing 4.5% in the previous session – a perceived marker of increased volatility. The 2-year treasury the yield fell more than two basis points to 4.331%.

Yields and prices move inversely to each other. One basis point corresponds to 0.01%.

The Fed cut interest rates by a quarter of a percentage point on Wednesday, a widely expected third cut in a row.

However, Chairman Jerome Powell struck a hawkish tone on the outlook for next year, raising his inflation forecast and pointing to just two possible rate cuts on the horizon, down from the four marked in September.

Chances of another rate cut at the Fed’s first policy meeting in January fell below 10%, according to Fed Funds futures trading tracked by Fed Funds. CME FedWatch tool.

Investors now look forward to Thursday for fresh readings on the labor and housing markets, as well as final US gross domestic product (GDP) data for the quarter.