Ankara: US Treasury yields moved sharply Wednesday after the Federal Reserve kept its benchmark interest rate unchanged, prompting investors to shift expectations for the central bank's next rate increase to September. The yield on the two-year Treasury note, which is particularly sensitive to monetary policy expectations, fell 2 basis points to 4.26%. Meanwhile, the 30-year Treasury yield rose 5 basis points to 5.14%, steepening the yield curve.

According to Anadolu Agency, interest-rate swap markets indicated a roughly 70% probability that the Fed would raise borrowing costs at its next policy meeting in September, while a quarter-point increase was fully priced in by October. The Fed kept the federal funds rate unchanged between the 3.5% and 3.75% range following its two-day policy meeting.

The decision was approved by a 9-3 vote, with Dallas Fed President Lorie Logan, Cleveland Fed President Beth Hammack, and Minneapolis Fed President Neel Kashkari dissenting in favor of a 25-basis-point rate increase. The policy statement provided limited guidance on the path of interest rates and reiterated the central bank's commitment to restoring price stability.