Treasury yields jump, Wall Street falls after Fed decision

By Nick Brown

NEW YORK, June 13 (Reuters) – U.S. Treasury yields jumped and Wall Street reversed earlier gains to close lower on Wednesday, after the Federal Reserve raised interest rates and signaled that two more hikes could be coming this year.

Ten-year U.S. Treasury note yields hit a one-week high, while two-year note yields rose to a three-week peak after the Fed’s decision to raise its benchmark overnight lending rate a quarter of a percentage point, to a range between 1.75 percent and 2 percent.

Policymakers also projected a slightly faster pace of rate increases in the coming months, with two additional hikes expected by the end of this year, compared to one previously.

Benchmark 10-year U.S. Treasury notes last fell 6/32 in price to yield 2.9774 percent, from 2.957 percent late on Tuesday.

The 30-year bond last fell 3/32 in price to yield 3.0967 percent, from 3.092 percent Tuesday.

The dollar index, which measures the greenback against a basket of currencies, fell 0.24 percent, with the euro up 0.41 percent to $1.1791.

“There was some question about the December rate hike and it looks like the Fed is sticking to that plan and I would say this is a very mild negative for risk markets,” said Matthew Forester, chief investment officer at Lockwood Advisors Inc in King of Prussia, Pennsylvania.

“Each rate hike becomes more difficult for the risk markets and the real economy to digest.”

The Dow Jones Industrial Average fell 119.53 points, or 0.47 percent, to 25,201.2, the S&P 500 lost 11.22 points, or 0.40 percent, to 2,775.63 and the Nasdaq Composite dropped 8.10 points, or 0.11 percent, to 7,695.70.

The losses came on

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