FX.co ★ US 10-Year Treasury Note Hovers Around 4%

On Monday, the yield on the US 10-year Treasury hovered around 4%, aligning with the lows observed in September 2024. Market participants are preparing for the delayed release of the September Consumer Price Index (CPI) report, expected on Friday. This will be the first significant government data publication since the initiation of the shutdown nearly four weeks ago. However, optimism grows as White House economic adviser, Kevin Hassett, indicated a potential resolution to the shutdown could occur "likely to end sometime this week." Investors found further encouragement in signs of improving US–China trade relations. President Trump's diplomatic efforts to ameliorate tensions come ahead of a new round of negotiations set to take place in Malaysia. A report from the Wall Street Journal highlighted that Trump has exempted numerous products from the mutual tariffs. Regarding monetary policy, the probability of a 25 basis-point reduction in the federal funds rate next week is currently estimated at approximately 99%.