As investors process the Fed's massive rate reduction, Treasury yields remain relatively unchanged.

On Thursday, U.S. Treasury yields remained relatively stable as investors processed the Federal Reserve's decision to reduce interest rates by 0.5% the previous day.

The yield on the increased by more than 2 basis points at 3.713% at 7:17 a.m. ET, compared to its previous low of 3.598% at the same time.

An inverse relationship exists between yields and prices, with one basis point equivalent to 0.01%.

On Wednesday, the Federal Reserve reduced the federal funds rate by 50 basis points, bringing it to 4.75%-5%. This was in line with market expectations, which had shifted from a 25 basis point cut to a 50 basis point reduction in recent days.

Since March 2022, the Fed has not made a first rate cut, indicating a change in its monetary policy approach.

The Fed's post-meeting statement stated that the Committee has gained greater confidence that inflation is moving sustainably toward 2 percent and believes that the risks to achieving its employment and inflation goals are roughly in balance.

The Federal Open Market Committee of the central bank indicated through its "dot plot" that it expects to make another 50 basis points worth of cuts by the end of 2024. Additionally, it suggested a full percentage point in cuts by the end of 2025 and a half point in 2026.

The Bank of England has decided to keep interest rates unchanged after cutting them for the first time in over four years in August. The central bank cited "high" inflation and a need for a gradual approach to monetary policy.

In the U.S., investors will also be focusing on the upcoming release of August's existing home sales data and the latest weekly initial jobless claims figures.