The US central bank is also now forecasting cuts of half a percentage point in 2024. In June, monetary authorities expected to cut one percentage point next year.
“It caught markets by surprise because there was a feeling that three months of encouraging inflation data would lower the temperature at the Fed,” said Will Compernolle, a senior analyst at FHN Financial in New York.
“However, for a number of reasons, they still feel that they have to continue to be aggressive and be very willing to continue to be restrictive,” he added.
The yield on benchmark 10-year bonds advanced to 4.49%, its highest level since November 2007, and that of two-year notes – sensitive to rates – operated at 5.202%, its highest since July 2006.