Treasury yields are falling after the Federal Reserve said it expects to keep its benchmark interest rate near zero until late 2014.
Short-term rates sank in Wednesday afternoon trading. The yield on the 5-year note plunged to 0.80 percent from 0.90 percent late Tuesday, a sharp move in the Treasury market. The two-year yield dropped to 0.22 percent from 0.24 percent.
The Fed said it’s keeping rates low to help a weak but slowly growing economy. That’s a change from the Fed’s previous pledge to keep rates near zero until the middle of 2013.
In other trading, the 10-year Treasury note is up 65.6 cents for every $100 invested. The higher price pushed its yield back below 2 percent. It fell to 1.98 percent from 2.06 percent late Tuesday.
