FX.co ★ US 10-Year Yield Steady Ahead of PPI Report

The yield on the US 10-year Treasury note remained above 4.48% on Wednesday, staying close to a five-week peak as investors anticipated the release of the latest producer price index data. This data is expected to provide insights into the inflationary effects of the tariffs imposed during the Trump administration. Yields had risen on Tuesday after consumer inflation reports delivered mixed results, prompting traders to lower their expectations for potential Federal Reserve rate cuts. While the overall inflation figures aligned with forecasts on both a monthly and yearly basis, core inflation was unexpectedly low. Dallas Fed President Lorie Logan contributed to the cautious atmosphere by suggesting that the Federal Reserve will likely need to maintain current interest rates for an extended duration. This comes in response to tariff-induced price pressures and aims to ensure inflation remains under control. Presently, market participants are betting on reduced chances of multiple rate cuts this year, and the likelihood of a rate adjustment in September is slightly above 50%.