By WSJ City 

Ten-year Treasury yields fell below 2% for the first time since late 2016 after the Federal Reserve stood pat on its benchmark rate but opened the door to a near-term-cut. That's the latest milestone in this year's global government bond rally that has sent yields in Europe to a series of record lows.

Interest-rate forecasts released on Wednesday showed eight of 17 officials project the Fed will cut the benchmark federal-funds rate this year, with seven of those officials seeing two quarter-point reductions.

"Half the committee is ready to pull the trigger on a rate cut at some point this year. Powell's tone in his press conference to me suggested the threshold for a rate cut is not particularly far away."

Thomas Simons, senior vice president and money-market economist in the fixed-income group at Jefferies LLC

KEY FACTS

--- The benchmark yield fell as low as 1.981% in Asian trading versus 2.023% late in the New York day.

--- Treasury prices surged higher after the Fed's signal on rates.

--- The 10-year yield had been as high as 3.232% on Nov. 8.

--- For most of this year, global bond yields have been falling and prices have been rising on growth concerns.

--- Yields have hit record lows in a number of European markets.

Analysis

Fed Chair Jerome Powell did little to alter the impression that the Fed was prepared to cut interest rates for the first time in more than a decade. Fed officials in their policy statement made note of both increased uncertainty about the economic outlook and muted inflation pressures, while saying they would "act as appropriate to sustain the expansion."

A fuller story is available on WSJ.com

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(END) Dow Jones Newswires

June 20, 2019 03:57 ET (07:57 GMT)