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US Treasury yields fall as Fed leaves interest rates unchanged

U.S. Treasury yields held lower Wednesday after the Federal Reserve kept interest rates unchanged.

Benchmark 10-year note yields traded at 1.5943 percent after the statement's release, while two-year note yields fell to session lows, before trading at 0.6736 percent. Thirty-year note yields last traded at 2.4241percent.

U.S. sovereign bond prices were trading higher ahead of the Federal Reserve's eagerly awaited June interest rate decision.

At about 12:50 p.m. ET, 10-year yields traded at 1.6028 percent, while two-year note yields were at 0.7219 percent.

Symbol
Yield
 
Change
%Change
US 3-MO
---
US 1-YR
---
US 2-YR
---
US 5-YR
---
US 10-YR
---
US 30-YR
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Rate rise expectations have dwindled significantly in recent weeks after non-farm payrolls data showed worse-than-expected jobs growth in May. However, a number of FOMC members have made relatively hawkish statements on the state of the U.S. economy in the run-up to the June meeting.

Producer price index data for May showed a 0.4 percent increase, while economists had forecast a 0.3 percent gain.

U.S. industrial production fell more than expected in May on a decline in utilities output and auto manufacturing, the Federal Reserve said on Wednesday, a sign that the economy may be losing some steam in the second quarter.

Industrial output declined 0.4 percent last month after a downwardly revised 0.6 percent increase in April.

Investors will also eye Treasury International Capital (TIC) data for April, due out at 4:00 p.m. ET, which measures the flow of assets including Treasury securities, corporate bonds and equities to and from the U.S.

No major Treasury auctions are expected.

—Reuters contributed to this report.

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