U.S. Treasuries slump post Fed-Chair Yellen delivers 25bps interest rate hike

The U.S. Treasuries slumped Thursday after the Federal Reserve Chair Janet Yellen delivered a 25 basis points rate hike in an overnight policy meeting, as was broadly anticipated by market participants. Also, investors remain optimistic over the release of initial jobless claims, expected to fall, which in turn, is pressurising bond prices.

The yield on the benchmark 10-year Treasury jumped nearly 2-1/2 basis points to 2.52 percent, the super-long 30-year bond yield also climbed 3-1/2 basis points to 3.14 percent and the yield on short-term 2-year note traded 1-1/2 basis points higher at 1.33 percent by 11:40GMT.

The US Fed raised interest rates by 25 basis points and continued to project two more increases this year, signaling more vigilance as inflation approaches its target.

"In view of realized and expected labor market conditions and inflation, the committee decided to raise the target range for the federal funds rate. Near-term risks to the economic outlook appear roughly balanced," the Federal Open Market Committee (FOMC) said in its statement on Wednesday.

Investors had almost fully expected the increase to a range of 0.75-1.00 percent following unusually clear signals from policy makers including Chair Yellen. Yellen, in her post-meeting conference, said the rate hike did not reflect a reassessment of the Fed's economic outlook.

Meanwhile, the S&P 500 Futures rose 0.24 percent or 5.75 points to 2,367.00 by 11:40GMT, while at 11:00GMT, the FxWirePro's Hourly Dollar Strength Index remained neutral at -111.73 (a reading above +75 indicates a bullish trend, while that below -75 a bearish trend). For more details, visit http://www.fxwirepro.com/currencyindex