US Treasury yields mostly fall as investors await Federal Reserve rate hike

As investors await a possible interest rate hike announcement from the Federal Reserve on Wednesday, yields on U.S. Treasuries generally declined across most maturities, except for a slight increase in ultra-long-term Treasury yields. Analysts at TD Securities noted in a report, "We currently expect the Federal Open Market Committee (FOMC) to raise the policy rate by 25 basis points in September, thereby initiating a tightening cycle; we expect the Federal Reserve to raise rates by a cumulative 75 basis points between September and the first quarter of 2027." They anticipate that, following the September rate hike, further hikes will occur in October and January. The yield on the 2-year U.S. Treasury fell by 3.3 basis points during the day to 4.610%; the yield on the 10-year U.S. Treasury fell by 1 basis point to 4.964%; while the yield on the 30-year U.S. Treasury rose by 0.8 basis points to 5.362%.