10-Year US Treasury Yield Climbs to 3.87%
10-year US Treasury yield climbed to 3.87% mark on Friday following the release of personal consumption expenditure (PCE) data. PCE showed that the price index in the US rose 0.2% month-over-month in July 2024, following a 0.1% increase in June, in line with forecasts.
The annual PCE rate was unchanged at 2.5%, below expectations of 2.6%, and the annual core PCE inflation steadied at 2.6%, also below the expected 2.6%.
In the market, the US Treasury rebounded after testing over-one-year lows of 3.8% this week as markets assessed the latest data for hints on the magnitude of rate cuts that the Federal Reserve will deliver in its upcoming cutting cycle.
The 10-year yield had plunged to a low of 3.667%, but the decline appears to have paused during the past couple of weeks. The U.S. 10-year Treasury yield is down 1 bps at 3.8624%.
Analysts said core PCE prices, the Federal Reserve’s preferred gauge for underlying inflation, edged higher by 0.2% from the previous month in July, as expected, matching the slight increase in the headline index.
The lack of upside surprises maintained bets that the US central bank will deliver 100bps in rate cuts in its three remaining meetings this year.
Still, personal income and spending also recorded monthly increases to back the view that the US economy remains broadly resilient to restrictive borrowing costs following yesterday’s upward revision to the US GDP, adding some leeway for the central bank to continue fighting inflation if it develops stickier tendencies before easing to the 2% target. #10-Year US Treasury Yield Climbs to 3.87%
