The rate-indicative 10-year Treasury yield fell below 4.2% Tuesday afternoon in the wake of the Federal Reserve's decision to leave rates unchanged, but it had rebounded back above that mark as of midday Wednesday.Mortgage rate-indicative bond yields initially fell because the explanatory statement accompanying the Fed's decision indicates that monetary policy officials believe disinflationary risks remain, according to Barry Habib, author of the Mortgage Market Guide rate advisory service for originators. In addition to noting that "the risk of inflation becoming undesirably low remains the predominant concern for the foreseeable future," the committee also said in its statement that "evidence … confirms that spending is firming and the labor market appears to be stabilizing."

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