The yield on the 10-year US Treasury note held around 5.31% on Wednesday, staying close to its highest level in 24 years as investors looked ahead to the minutes of the Federal Reserve’s latest meeting for guidance on the future path of monetary policy. Market participants also parsed comments from Fed officials, who have increasingly signaled a less hawkish stance on interest rates after last week’s softer-than-expected PCE inflation and employment data. Futures markets now imply nearly an 80% probability that the Fed will leave rates unchanged this month.
At the same time, Treasury prices remained under pressure as worries over stubborn inflation, growing fiscal risks, and an uptick in AI-related debt issuance continued to dampen sentiment. Oil prices moved higher as renewed attacks on tankers in the Strait of Hormuz and ongoing clashes between Saudi forces and the Houthis raised concerns about energy supply disruptions, keeping inflation risks and the prospect of further rate hikes firmly in focus.
