Home Society US interest falls below 2% after Fed decision

US interest falls below 2% after Fed decision

The interest rate on 10-year American government bonds fell to below 2% on Thursday, the lowest level since November 2016.

Although the US central bank kept its powder dry yesterday evening when the interest rate decision was announced, due to economic uncertainties and low inflation, the door was opened to possibly one or more interest rate cuts in the second half of this year.

The prospect that the Fed may already take action in the short term pushed interest rates on 10-year government bonds back 4 basis points to 1.98%. At the end of November last year the interest was still above 3%.

The dollar also came under pressure in response to an expected monetary easing by the Fed compared to the euro, among other things. The US currency slipped 0.4% to € 0.8868.

The gold price was boosted by the hints of Fed chairman Powell. The precious metal rose to the highest level in five years.

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