A bond market rebound may be in the works after weeks of volatility that sent yields to their highest levels in years.
Investors have been struggling against a global sell-off in government bonds lately, with Treasury yields rising again after the Fed announced its first rate hike in three years on Wednesday.
The yield on the 10-year US Treasury rose back above 5% as investors took in the rate decision, with some investors pricing in as many as two additional rate hikes through the end of the year. The rate hike came as investors have been fleeing US government debt amid fears about inflation and an uneasy fiscal outlook.
But fears seemed to subside on Thursday. Yields sank as appetite returned to the US Treasury market. The 10-year bond yield dropped five basis points to 4.95%, solidly below the 5% threshold that investors have eyed as a "danger zone" for stocks.
The 2-year US Treasury yield, which is the most sensitive to Fed rate moves, declined 4 basis points to around 4.68%.
Here's what's helping yields edge lower:
1. A sigh of relief on inflation
The Fed reiterated its commitment to bringing inflation back to its 2% target at its last policy meeting, helping to soothe anxiety...