FX.co ★ US 10-Year Yield Rebounds from 5-Month Low

On Wednesday, the yield on the 10-year US Treasury note rebounded to 4.07% after dipping below the five-month low of 4%, as the market evaluated the interest rate outlook in light of the Federal Reserve's recent rate cut. The Federal Open Market Committee (FOMC) lowered rates by 25 basis points, as anticipated, marking a restart of the cutting cycle that had been on hold since December. According to FOMC members' median forecasts, policymakers anticipate two more rate cuts within this year. However, strong projections for real economic growth, low unemployment, and upward adjustments in core inflation have fostered some skepticism regarding the potential for deeper cuts next year, leading to an increase in yields across all maturities. On the funding market front, the Fed has sustained its quantitative tightening pace despite a notable reduction in its overnight reverse repo facility since the last meeting.