Markets reacted negatively as the Federal Reserve abandoned forward guidance, pushing Treasury yields higher and equities lower.
The Federal Reserve kept interest rates unchanged but signaled a shift away from forward guidance, emphasizing data dependency over policy signals. Chair Kevin Warsh indicated the bond market would play a larger role in determining rate paths, a departure from prior Fed communication strategies.
Treasury yields rose sharply, with the 10-year yield climbing 8.1 basis points to 4.685% and the 30-year yield up nearly 12 basis points to 5.211%. The 2-year yield edged up just 1 basis point to 4.264%, reflecting uncertainty over the next policy move. Equities sold off, with the Nasdaq 100 and Dow dropping 2.06% and 2.19%, respectively.
The U.S. dollar weakened against major currencies, with the EUR gaining 0.70% and the GBP rising 0.56%. Technology shares faced additional pressure from higher long-term yields, extending recent losses.