Bonds Regain Losses as Investors See Uncertainty From Fed


Treasury debt prices recouped losses to trade unchanged after the Federal Reserve cut interest rates by 25 basis points, as was widely expected, and signaled financial markets remain stressed.

The Fed cut lowers the target federal funds rate to 2.00 percent from 2.25 percent. The U.S. central bank said in a statement that recent economic activity remains weak, and that it will act as needed to promote growth.

The benchmark 10-year Treasury note was trading flat in price for a yield of 3.83 percent, while the 2-year Treasury note was also unchanged for a yield of 2.38 percent.

Economists on average are forecasting April non-farm payrolls to have fallen by 80,000 when the data are released Friday, which would be on par with an 80,000 dip in March.

Bonds largely shrugged off a report Wednesday morning showing business activity in the Midwest contracted in April for the third straight month, although it was slightly less weak than expected.