FX.co ★ US 10-Year Yield Steadies Ahead of Fed Decision

The yield on the US 10-year Treasury note held near 4.62% on Wednesday as investors awaited the Federal Reserve’s policy decision, with policymakers widely expected to keep interest rates on hold. Even so, markets are still pricing in roughly a one-in-three chance of a 25-basis-point increase, an unusually high degree of uncertainty at this stage compared with recent years. Traders also see about an 80% probability of a rate hike in September, reinforcing expectations that borrowing costs may remain elevated for longer. At the same time, investors tracked a rebound in oil prices and renewed inflation worries after fresh hostilities erupted in the Middle East. The US military said it had successfully intercepted what it described as a surprise Iranian attack on US forces stationed across the region, reigniting geopolitical tensions.