Treasury yields rallied Thursday even after the Federal Reserve raised its policy rate and signaled that another increase remains possible. The 10-year Treasury yield fell 7 basis points to 4.95%, reversing part of its climb to 5.04% on Tuesday, the highest since July 2007. The decline came mainly from a reduction in the inflation premium rather than a deterioration in growth expectations: The 10-year TIPS yield fell 2 basis points, narrowing the breakeven rate to roughly 2.30% from about 2.36%. The Federal Open Market Committee voted 12-0 to raise the federal funds rate by 25 basis points to a target range of 3.75% to 4%. Updated projections showed a median expectation of one further quarter-point increase in 2026, with 12 of 18 officials seeing one additional hike and four seeing two. Strong economic data, including retail sales growth and an Atlanta Fed GDPNow estimate of 5.1% third-quarter real GDP growth, provided little support for policymakers favoring a near-term pause. Bank of America economist Aditya Bhave said the bank continues to expect two more 25-basis-point increases, in October and December. Long-duration Treasury ETFs remained near their 52-week lows despite the two-day market move.