Treasury curve flattens after Fed lifts rates for first time since 2018, signals more hikes are on the way

Two- and 10-year Treasury yields advanced further to their highest levels since May 2019 on Wednesday after the Federal Reserve delivered a quarter percentage point interest rate increase and signaled a total of seven hikes are on tap for this year.

Gains in the 2-year yield outpaced those of the 10-year rate, flattening the spread between the two sharply during Fed Chairman Jerome Powell’s post-meeting press conference. Meanwhile, a fresh part of the Treasury curve inverted after the Fed’s decision on Wednesday.