FX.co ★ US 10Y Yield Holds Firm on Hawkish Fed Remarks

The yield on the US 10-year Treasury note hovered near 4.97% on Wednesday, staying close to its highest level in 19 years, as hawkish remarks from Federal Reserve officials reinforced expectations of further interest rate hikes this year. Richmond Fed President Tom Barkin cautioned on Tuesday that inflationary shocks may take time to dissipate and that elevated price pressures risk becoming entrenched. Boston Fed President Susan Collins wrote in a LinkedIn post that she supported last week’s rate increase, citing concerns that inflation could remain above the Fed’s 2% target. Futures markets now imply roughly a 54% probability of another Fed rate hike in October. At the same time, oil prices fell for a sixth consecutive session after President Donald Trump said US officials had a very good meeting with Iranian envoys, easing inflation worries and reducing pressure on the Fed to tighten policy aggressively.