The U.S. 30-year yield fell below 4% to the lowest level since July as bond investors continued to assess the implications of the Federal Reserve’s recent policy shift.  

The 30-year Treasury bond’s yield declined as much as 3.6 basis points to 3.99%, extending its retreat from a multiyear high of 5.18% reached in October. Fed policy makers Dec. 13 published new quarterly forecasts for the U.S. benchmark interest rate they control showing they anticipate lowering it more next year than they did in September.

Five- to 10-year Treasury yields fell back below 4% in the initial reaction to the Fed’s communications following its last monetary policy deliberations of 2023. The only fixed-rate Treasury tenors that still yield more than 4% are two- and three-year notes—most closely tied to the central bank’s policy rate, which remains 5.25%-5.5%—and the 20-year bond, for which there’s less investor interest.

Treasury yields remain high by recent historical standards, the 30-year having briefly traded below 1% during 2020 when the Fed’s interest rate was 0% and the central bank was buying Treasury securities to further support the U.S. economy.

This article was provided by Bloomberg News.