10-year Treasury yield briefly dips below 4.3% on slowing inflation

U.S. Treasury yields fell Wednesday after the Federal Reserve indicated it was making inroads on inflation following a cool May CPI report.

The rate on the 10-year Treasury last dropped 8 basis points to 4.318%. The benchmark yield slid as low as 4.25% at one point, its lowest level since April 1.

The 2-year Treasury yield last sank more than 7 basis points to 4.756%.

Yields and prices have an inverted relationship and one basis point is equivalent to 0.01%.

The Fed kept interest rates unchanged at 5.25%-5.50% on Wednesday, but forecast it will lower interest rates just one time later this year, down from three rate cuts projected in March. The central bank also indicated slight optimism that inflation is on pace to meet its 2% goal.

“Inflation has eased over the past year but remains elevated,” the post-meeting statement said. “In recent months, there has been modest further progress toward the Committee’s 2 percent inflation objective.”

The Fed decision came after May consumer prices came in below expectations. The reading showed that CPI was flat month over month in May and up 3.3% year over year. Economists surveyed by Dow Jones expected a monthly gain of 0.1% and 3.4% year over year.

The core CPI, which excludes volatile food and energy prices, showed a slightly hotter price increase but was also below expectations.

— CNBC’s Jeff Cox contributed to this report.