Investment Daily: Treasuries declined following the Fed policy decision

30 April 2026

US stocks ended little changed on Wednesday, following the Fed policy decision and ahead of major earnings releases after the market close. The S&P 500 closed flat.

US Treasuries dropped amid higher oil prices after the Fed policy decision. 10-year yields climbed 8bp to 4.43% while 2-year yields jumped 11bp to 3.95%.

European stocks fell on Wednesday as investors assessed higher oil price and a cautious earnings season. The Euro Stoxx 50 lost 0.3%. The German DAX slid 0.3% and the French CAC fell 0.4%. In the UK, the FTSE 100 closed 1.2% lower.

European government bonds fell. 10-year German bund yields rose 4bp to 3.11% and 10-year French bond yields rose 6bp to 3.78%. In the UK, 10-year gilt yield rose 7bp to 5.07%.

Asian stock markets mostly rose on Wednesday, with major central banks’ policy decisions and earnings from US tech heavyweights in focus. Korea’s Kospi extended its recent rally, rising 0.8%. Hong Kong’s Hang Seng climbed 1.7% while China’s Shanghai Composite gained 0.7%. Elsewhere, India’s Sensex added 0.8%.

Crude oil prices rose further on Wednesday. WTI crude for June delivery settled 7.0% higher at USD106.9 a barrel.

In the US, the Federal Reserve (Fed) kept interest rates on hold, as widely expected, but three officials dissented from maintaining an easing bias. Fed Chair Powell said that the committee is moving toward a more neutral outlook for future rate changes, though the majority did not feel the urgency to make the change now.

US PCE inflation likely rose to 3.5% yoy in March from 2.8% yoy in February, driven by lagged tariff pass-through and higher energy prices. GDP growth is expected to have rebounded in Q1, reflecting the end of the government shutdown, although consumer spending is likely to soften.

In the eurozone, the latest European Central Bank comments suggest a wait-and-see stance in the near term, holding its policy rate at 2.00%, but with a bias to tighten amid upside inflation risks. Another modest rise is expected for Q1 GDP growth, but headwinds for the household sector are building. Higher energy prices are expected to boost headline inflation in the short term, while core inflation should remain closer to 2.0%.

No rate change in the Bank of England (BoE) policy rate is envisaged in the near term. The BoE will closely monitor inflation expectations and second-round effects.