US government interest rates were mixed Thursday morning as investors continued to digest the Federal Reserve’s latest policy update.
The yield on the benchmark 10-year government bond rose by less than basis points to 1.8495% at 03:45 ET. The yield on the 30-year government bond fell by 2 basis points to 2.1413%. The dividend moves in reverse to prices, and 1 basis point is equal to 0.01%.
The 10-year interest rate traded above 1.86% on Wednesday, after the Fed signaled that it could start raising interest rates in March, for the first time in more than three years.
Fed Chairman Jerome Powell said at a news conference after the meeting that he felt there was “quite a bit of room” to raise interest rates without hurting the labor market.
In a statement after the meeting, the Federal Open Market Committee said that with “inflation well above 2 percent and a strong labor market, the committee expects that it will soon be appropriate to raise the target range for the federal funds rate.”
In addition, the FOMC said the central bank’s monthly bond purchases will continue with only $ 30 billion in February, indicating that the program is expected to end in March, while interest rates rise.
Bill Smead, chief investment officer at Smead Capital Management, told CNBC’s “Squawk Box Europe” that “the market has been in denial of what we call the ‘inflation jerk’.”
“They got this out in the pandemic, the uprising [of] inflation as a way to heal the economy, as a friendly puppy, and inflation is not a friendly puppy, “Smead said.
On Thursday, a reading of U.S. economic growth in the fourth quarter will be announced at. 8:30 ET.
The number of applications for unemployment filed during the week ending January 22 is also set to be out at 6 p.m. 8:30 ET.
Meanwhile, the number of pending home sales in December is scheduled for release at. 10 ET.
Auctions are scheduled to be held on Thursday for $ 50 billion of 4-week notes, $ 40 billion of 8-week notes and $ 53 billion of 7-year notes.
– CNBC’s Jeff Cox contributed to this market report.