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The benchmark 10-year Treasury yield rose Wednesday after the Federal Reserve held its key interest rate steady.
The 10-year yield traded more than 3 basis points higher at 4.641%. The longer-dated 30-year Treasury bond yield gained 5 basis points at 5.141%.
The 2-year Treasury note yield, which more closely tracks short-term Federal Reserve interest rate policy, traded flat at 4.265%.
One basis point is equal to 0.01%, and yields and prices move in opposite directions.
The rate-setting Federal Open Market Committee left rates unchanged at the range of 3.5% to 3.75%. The move came with some opposition, however, with three policy members dissenting in favor of raising rates by a quarter percentage point.
"We're reading this as a Committee with vocal hawks but the majority is siding with Warsh to keep rates stable until at least September when policymakers will have the benefit of the July and August CPI reports," Ian Lyngen, BMO's head of U.S. rates, said in a note.
While Fed Chairman Kevin Warsh took over a Fed that has seen inflation exceed its 2% target since 2021, the consumer price index — a broad measure of inflation — posted an unexpected decline last month, bringing the annual inflation rate down to 3.5% in June. But in the weeks that followed, oil prices jumped again amid the escalating conflict in the Middle East.
Warsh stressed that the committee will be quick to act if inflation pressures accelerate.
"I want to stress, of course, that decisions by this committee matter a great deal, and where necessary and appropriate, we will not hesitate to act," Warsh said in a press conference.
Energy prices spiked again Wednesday after President Donald Trump told a Fox News reporter that the U.S. will be hitting Iran "hard" in response to the surprise attacks. West Texas Intermediate crude futures advanced 6.9% to trade at $89.88 a barrel.
Iran targeted American forces in the Middle East with ballistic missiles, U.S. Central Command said late Tuesday. Centcom in a post on X said that the attack originated from Iran, but all missiles were intercepted. "Islamic Revolutionary Guard Corps forces launched multiple ballistic missiles from Iran in an attempted surprise attack on U.S. forces based in the Middle East."
— CNBC's Jessica Dickler also contributed to this report.
