FXStreet (Mumbai) – The yield on the benchmark 10-year US treasury yield hovers around 2% level ahead of the FOMC rate decision due later today.
The yield, which stood at 2.3% on December 16-17, fell to 1.939% this month before recovering slightly to trade around 2%.
The drop in the yield was triggered by risk aversion in the financial markets. Moreover, speculation that the Fed will not be able to deliver four more rate hikes due to financial market instability also weighed over the treasury yields.
The FOMC statement due today is likely to take a note of the risk aversion in the markets; something that could be read as dovish. The central bank killed rate hike bets in September after it cited risk from financial market instability following the risk aversion seen in August.
(Market News Provided by FXstreet)