US 10-Year Treasury Yield Dips after Fed Rate Cut Notice
The yield on the US 10-year Treasury note held its recent decline to below 3.8% on Monday following dovish comments from the Federal Reserve chief.
Fed Chair Jerome Powell said in his Jackson Hole address on Friday that the time has come to adjust policy amid rising risks to the labor market, while expressing confidence that inflation will return to the central bank’s 2% target.
The central bank is widely expected to start easing policy in September, but remains divided on the size of the first rate cut. However, traders are pricing in about 100 basis points in total reductions from the Fed’s three remaining meetings this year.
Investors now look ahead to initial jobless claims data on Thursday to gauge the state of the labor market, as well as the July personal consumption expenditures reading on Friday.
The 10-year falls for the second consecutive week, down 0.086 percentage point to 3.806%. The two-year snaps a two-week winning streak and declines 0.151pp to 3.912%.
Elsewhere, the UK 10-year gilt yield dropped to 3.91% after Bank of England Governor Andrew Bailey suggested potential for faster rate cuts, citing quicker-than-expected inflation reduction.
He stressed caution until inflation targets are consistently met, following last month’s rate cut from 5.25% to 5%.
The yield on the Italian 10-year BTP fell further to below 3.60%, in line with its European and U.S. counterparts, after Fed Chair Jerome Powell signaled that long-awaited interest rate cuts are finally coming. #US 10-Year Treasury Yield Dips after Fed Rate Cut Notice
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