Treasury yields fall, but hover at multiyear highs ahead of expected Fed interest rate hike

2-year Treasury yield hits 2-week high as investors factor in another half-point Fed rate hike for September
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Yields on 2-, 10- and 30-year Treasurys fell early Wednesday, but remained at multiyear highs ahead of an expected 75 basis point interest rate hike by the Federal Reserve.

What are yields are doing
  • The 2-year Treasury note yield 
    TMUBMUSD02Y,
    3.360%
    fell 6 basis points to 3.364%, after on Tuesday afternoon climbing 15.6 basis points to 3.435%, marking the highest level since Nov. 14, 2007, according to Dow Jones Market Data. Wednesday’s drop also come on the heels of the largest eight-day yield rise for the 2-year note since Aug. 14, 1989.

  • The yield on the 10-year Treasury note 
    TMUBMUSD10Y,
    3.414%
     fell 5 basis points to 3.428% after climbing 11.1 basis points to 3.482% on Tuesday, which marked the highest level since April 14, 2011. As of Tuesday, the yield also saw its biggest five-day rise since Oct. 14, 2008.

  • The yield on the 30-year Treasury bond 
    TMUBMUSD30Y,
    3.378%
     fell 3 basis points to 3.395%, after climbing 6.4 basis points to 3.432% on Tuesday, the highest since Nov. 2, 2018.

What’s driving the market?

Treasurys sold off aggressively on Tuesday as markets are now widely expecting a 75 basis point, or three quarters of a percentage point, interest rate hike from the Federal Reserve when its decision is announced later Wednesday. The magnitude of such a hike would be the biggest in nearly 30 years.

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