Bond yields drop as Fed decides to hold rates

Federal Reserve Chair Janet Yellen holds a news conference following the Federal Open Market Committee meeting in Washington September 17, 2015.
Jonathan Ernst | Reuters

U.S. government debt prices were higher Friday as investors reacted to yesterday's decision from the Federal Reserve to hold off rising rates.

The Fed's Federal Open Market Committee (FOMC) decision was announced yesterday afternoon.

Fed Chair Janet Yellen commented in a briefing that, "In light of the heightened uncertainties abroad and the slightly softer expected path for inflation, the committee judged it appropriate to wait for more evidence, including some further improvement in the labor market, to bolster its confidence that inflation will rise to 2 percent in the medium term."


The Fed last raised rates nine years ago, and Thursday's decision was one of the most anticipated in years, since there was a reasonable chance the central bank could have hiked the cost of borrowing. About half of Wall Street's economists expected a rate hike, even though market expectations were just about 30 percent.

The yield on the benchmark 10-year Treasury note sat lower on Friday, at around 2.143 percent, after closing at 2.217 percent on Thursday. The yield on the 30-year Treasury bond was also lower, at 2.942 percent, after closing at 3.036 percent. The yield on a bond falls when its price rises.

On the data front, U.S. leading indicators rose 0.1 percent in August, below the expected 0.2 percent gain.

--CNBC's Patti Domm contributed to this report