The Clap
Yields on the treasury notes edged a little bit higher as the Fed set to announce their decision following a 2 day policy meeting that started Tuesday.
The Deets
The yield on the 10 year Treasury note rose 1 basis point to 2.8068% while the yield on the 30-year Treasury bond moved 2 basis points higher to 3.0284%.
Economists are predicting a 75 basis point hike to interest rates in order to curb inflation as well as controlling the slowdown in economic growth.
Lower than expected earnings for many companies over the past week may be the main driver in hiking up interest rates, as businesses show weakness ahead of economic pressures.
Why is this important?
The Fed interest rate has a significant influence on the amount of money in circulation.
When the Fed increases interest rates, it encourages people to save more money and pushes investors away from borrowing money as the interest will be high.
This in turn, reduces the money in circulation helping to slow down inflation and also moderates economic activity.
Treasury yield growing in anticipation of Fed’s decision ⏳
