Treasury yields climbed on Wednesday after the Federal Reserve kept interest rates unchanged. Investors also digested data showed the U.S. economy grew at a much better than expected pace in the second quarter.
The 10-year Treasury yield rose about 2 basis points at 4.35%. The 2-year yield was up by less than 1 basis point at 3.88%, and the 30-year note yield gained 3 basis points to 4.897%.
The Fed on Wednesday afternoon voted to keep the federal funds rate set in a range between 4.25%-4.5%, going against President Donald Trump’s demands for rate cuts. Traders had expected this decision.
The Federal Open Market Committee, the group that sets the overnight borrowing rate, voted 9-2 to stay on hold, however. Governors Michelle Bowman and Christopher Waller both opposed the decision, marking the first time since late 1993 that multiple governors cast no votes on a rate decision. Bowman and Waller have advocated for the central bank to ease rates to avoid a potential slowdown in the labor market.
Earlier in the day, gross domestic product, a sum of goods and services activity across the sprawling U.S. economy, jumped 3% for the April-through-June period. That release exceeded the Dow Jones estimate for 2.3% and helped reverse a decline of 0.5% for the first quarter.
— Jeff Cox contributed to this report.
