As traders evaluate the likelihood of future Fed rate reductions, treasury yields decline.

On Tuesday, the Federal Reserve retreated, while traders evaluated the possibility of future rate cuts.

The benchmark yield dropped by approximately 2 basis points to 3.933%, marking its lowest point since July after falling below 4% on Thursday.

The yield on the decreased by about 3 basis points to 4.041%, while the yield on the dropped more than 1 basis point to 4.444%.

Yields move inversely to prices. One basis point equals 0.01%.

After the Fed announced three possible interest rate cuts in 2024, treasury yields have decreased from their previous highs. The sudden shift in monetary policy direction caused a sharp decline in the 10-year yield as investors increased their bets on a quicker easing of monetary policy.