The 10-year Treasury yield reaches a one-month low following the Fed's rate decision and policy guidance.

The 10-year U.S. Treasury yield reached a one-month low on Thursday due to investors' reactions to the Federal Reserve's latest interest rate decision and hints about future rate cuts.

The benchmark rate dropped more than 10 basis points to 3.86%, falling further below the key 4% level breached Wednesday. The previous rate was 2.9 basis points lower at 4.20%.

Prices and yields move in opposite directions, with one basis point equal to 0.01%.

Although the Fed did not alter interest rates on Wednesday, Fed Chairman Jerome Powell stated that it was unlikely that rates would be reduced at the upcoming Fed meeting in March. However, he added that rate cuts could occur later in the year.

The Fed's policy statement, released with the rate decision, indicated that further rate hikes were no longer a possibility, marking a change from the previous policy meeting in December.

The Monetary Policy Committee of the Bank of England voted 6-3 to keep interest rates unchanged, with two members supporting a 25 basis point increase and one supporting a quarter-point cut.

Last month, the U.S. manufacturing sector remained in contraction, as indicated by the fresh ISM manufacturing index data that investors analyzed. The index recorded a reading of 49.1 in January, which was slightly above the Dow Jones estimate of 47.2.