US government debt bounced Wednesday, with the yield on the two-year note recording its largest one-day surge in eight months, as the Federal Reserve indicated a potential interest rate hike in December.
Following its two-day policy meeting, the Fed retained its short-term interest rate near zero. But officials implied the December meeting is the best time to determine whether it is about time to raise rates.
The yield on the two-year Treasury note ended at 0.0707%, its one-month peak, compared with 0.650% ahead of the Fed’s statement. The yield on the 10-year note closed at 2.094%, its highest since October 9, compared with 2.074% earlier.
Fed’s reference caught many traders off guard as they had expected the central bank to stand pat on rates.
The material has been provided by InstaForex Company – www.instaforex.com