Federal Reserve Chairman Jerome Powell speaks during a news conference following the September meeting of the Federal Open Market Committee at the William McChesney Martin Jr. Federal Reserve Board Building on September 18, 2024 in Washington, DC.
Treasury yields dipped on Thursday as investors reacted to Donald Trump's sweeping election victory and awaited the Federal Reserve's decision on interest rates.
The 10-year Treasury yield fell 4 basis points to 4.39% after jumping over 14 basis points in the previous session. The yield on the 2-year Treasury fell 5 basis point to 4.19%.
Yields and prices move in opposite directions. One basis point equals 0.01%.
Trump's stunning victory over Vice President Kamala Harris marks a historic return to the White House for one of the most divisive figures in modern American politics.
It has fueled questions about whether Trump will set about introducing tax cuts and steep tariffs, which could boost economic growth but also widen the fiscal deficit and reignite inflation.
Investor focus, meanwhile, shifts to the Fed on Thursday. The U.S. central bank is widely expected to deliver another interest rate cut, with financial markets pricing in the prospect of a quarter-point move lower as a near certainty.
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The fed funds rate, which sets what banks charge each other for overnight lending but often influences consumer debt as well, is currently targeted in a range between 4.75%-5.0%.
Money Report
Market pricing currently favors another quarter-point cut in December, followed by a January pause, then multiple reductions through 2025.
"At the margin, the Fed may slow the pace of rate cuts if it perceives that potential changes to migration, trade, or fiscal policy may lead to higher inflation," Solita Marcelli, global wealth management CIO for the Americas at UBS, said in a note to clients Thursday.
On the data front, initial jobless claims came in roughly in-line with estimates at 221,000. Economists surveyed by Dow Jones were expecting 220K claims for the week ending Nov. 2.
— CNBC's Jeff Cox contributed to this report.
