Mumbai, Aug 1 : The yield on benchmark 6.54%-2032 bond fell sharply by around 10-12 basis points since last week after the US Federal Reserve hints at slower hiking path and correction in commodity prices. The 10-year benchmark 6.54%-2032 bond which was trading at 7.39%, is now trading at 7.24%, down nearly 13-15 basis points. "With less than expected rate hike by Fed in last week and its comments in the speech which were non-directional for further rate hikes were kind of comfort to the market and yields post that in US market were down from 2.90% to 2.70% now," said Ajay Manglunia, MD and Head Institutional Fixed Income at JM Financial. Last week, US Federal Reserve raised interest rates by 75 basis points, as was widely anticipated, and comments from Fed Chair Jerome Powell spurred hopes for a slower hiking path. The FOMC statement downgraded its assessment of the economic situation and admitted that recent indicators of spending and production have softened. Sentiments of investors got boosted after the US data show contraction in the economy for the second consecutive month raised hope that US Fed will not go aggressive rate hike. Meanwhile, the global commodore prices are falling on fears of a recession in the advanced world. This is expected to cool down retail inflation in India too. "The pressure on commodities prices is easing with lot of metals and other commodities falling by 15-30%. This should ease the inflationary pressure going forward," Arun Malhotra, Founding partner & portfolio manager at CapGrow Capital advisors. Market participants said this is crucial week as we have a monetary policy outcome and the central bank may announce a new benchmark bond as current benchmark bond's outstanding has surpassed Rs 1 lakh crore. As per data collected from market sources, the outstanding of current benchmark bond is Rs 1.43 lakh crore. While, the central bank is expected to hike 25-50 basis points repo rate in the upcoming policy due this week. "We are in a crucial week, we have monetary policy committee meeting and expecting 35 basis points rate hike with dovish stance. We don't see too much down side in yields and it will remain range bound as it has seen a good rally from 7.65% to 7.25%. Selling pressure at this level will remain high," said Umesh Tulsyan, Managing Director, Sovereign Global Markets Pvt Ltd. Traders believe till the announcement of the monetary polìcy, market is expected to trade in a narrow range. "7.20-7.45 levels can be seen this week. No expected to move up or down dramatically soon," Manglunia added. /IANS