The specifics of the news didn't really matter to the bond market, however. Traders read headlines of "weakness" and ran with it. Shorter-dated instruments paced the gains on speculation the shift was the precursor to an easing. That reversed earlier losses following a tepid reintroduction of the 3-year note. Fed funds futures gained to reflect nearly 80% chance of a rate cut by Summer, after only about 60% chance earlier.
Treasuries were flat to lower heading into the Fed's afternoon announcement, held back by uncertainty over the FOMC and refunding supply. A disappointing 3-year sale weighed on Treasuries into the Fed's statement. The note was auctioned at an as-expected 2.009%. But the relatively low 1.96 cover (vs 2.44 average) generated concerns about the rest of the support for the upcoming 5-year and and 10-year notes. But those anxieties were relieved by the FOMC's announcement.