FX.co ★ US 10-Year Yield Holds Gains

The yield on the US 10-year Treasury note hovered near 5.13% on Tuesday after rising in the previous session, as investors weighed the Federal Reserve’s policy outlook ahead of its October 27–28 meeting. Attention is also focused on the upcoming release of the Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge. Current market pricing reflects an 83% probability that the central bank will leave interest rates unchanged next week, alongside a 94% likelihood of a rate hike in December. On Friday, Fed Chair Kevin Warsh avoided signaling the likely outcome of this month’s FOMC meeting, but noted that stronger-than-expected inflation had not altered his view of the US economic outlook. At the same time, persistently elevated oil prices continued to stoke inflation concerns, underpinning upward pressure on bond yields globally.