Treasuries rally as Fed hints at rate cuts

Wednesday, 05. June 2019 08:51

Prices of United States government debt rose significantly on Wednesday, pushing yields lower, parallel to a rebound in stocks on a global scale as well as gains in gold and silver. Federal Reserve Chairman Jerome Powell yesterday expressed determination to "sustain the expansion" of the domestic economy. His remarks were interpreted as readiness to lower interest rates as means of relief and they were followed by hints from other top officials from the central bank. Financing conditions have recently tightened together with a selloff in stocks and commodities and market bets targeted a cut in borrowing costs as soon as next month at the Fed's regular meeting.

The yield on the two-year US note tumbled 2.9 basis points to 1.851% at 2:46 am ET. The ten-year rate fell 3.5 points to 2.099%. The yield on the 30-year bonds declined 2.5 points to 2.59%. Corresponding futures advanced 0.08%, 0.31% and 0.43%, respectively. Of note, Germany's benchmark ten-year bond jumped to take the yield 1.6 points down to a negative 0.222%, following a dip to 0.226% below zero, a record low. Bund futures gained 0.12%.

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