Indian bond yields decline after US Fed slashes interest rates

The Federal Open Market Committee voted 11 to 1 to lower the federal funds rate to a range of 4.75 percent to 5 percent, after holding it for more than a year at its highest level in two decades.

Indian bond yields fell in the afternoon trade on September 19 after the US Federal Reserve cut interest rates.

At 12:33pm, Indian 10-year benchmark bond 7.10 percent 2034 was trading at 6.7414 percent, lower than 6.7896 percent at open and 6.7808 percent close in the previous trading session.

The Federal Reserve lowered its benchmark interest rate by a half percentage point on Wednesday, in an aggressive start to a policy shift aimed at bolstering the US labour market.

Projections released following their two-day meeting showed a narrow majority, 10 of 19 officials, favoured lowering rates by at least an additional half-point over their two remaining 2024 meetings.

The Federal Open Market Committee voted 11 to 1 to lower the federal funds rate to a range of 4.75 percent to 5 percent, after holding it for more than a year at its highest level in two decades.

Wednesday's decisive move highlights the growing concern among policymakers over the employment landscape. “The committee has gained greater confidence that inflation is moving sustainably toward 2percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Fed said in a statement, adding that officials are “strongly committed to supporting maximum employment” in addition to bringing inflation back to their goal.

Money markets were shut on Wednesday after a shift in holiday for Id-e-Milad.