Treasury Bond Yields Rise Across the Board Following Hawkish Fed Stance; 3-Year Yield at 3.750%

South Korean Treasury bond yields rose across the board today (June 18) as the possibility of a U.S. Federal Reserve interest rate hike within the year increased.

In the Seoul bond market today, the yield on the benchmark 3-year Treasury bond closed at 3.750% per annum, up 4.0 basis points (1bp=0.01% point) from the previous trading day.

The 10-year bond yield rose by 4.7bp to 4.118% per annum.

The 5-year and 2-year bond yields climbed 5.2bp and 3.7bp, respectively, closing at 3.949% and 3.608% per annum.

The 20-year bond yield rose 3.3bp to 4.232% per annum.

The 30-year and 50-year bond yields increased by 3.9bp and 3.5bp, respectively, to record 4.204% and 4.068% per annum.

Foreign investors net bought 3,428 contracts of 3-year Treasury bond futures and net sold 1,858 contracts of 10-year Treasury bond futures.

Treasury bond yields rose today as the U.S. Federal Reserve delivered a more hawkish stance than expected following its Federal Open Market Committee (FOMC) meeting overnight.

The Fed held its first FOMC meeting under Chair Kevin Warsh on June 17 (local time), keeping the benchmark interest rate frozen at 3.50–3.75%.

While this was expected, the "dot plot" released on the same day showed the median projection for the year-end benchmark interest rate at 3.8%, up 0.4 percentage points from the 3.4% projection in the March meeting.

Out of the 18 officials who submitted year-end interest rate forecasts, nine predicted a rate hike.

This result reverses the situation from three months ago, when expectations for a rate cut were dominant.

However, the rise in Treasury bond yields was limited as the market had already partially priced in the possibility of a hike, and international oil prices fell to the $70 range.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.