FX.co ★ US Yields Hold Rebound

The yield on the 10-year U.S. Treasury note stood at 4.17% last Friday, maintaining its recovery from the five-month low reached on September 16th. This recovery was buoyed by robust economic data that lessened the Federal Reserve's immediate need for additional rate cuts. In August, both personal income and spending rose more than anticipated, following a mid-September dip in unemployment claims which suggested a stronger labor market. Meanwhile, both headline and core PCE price indices pointed to ongoing inflationary pressures within the economy. While rate futures still anticipate a second consecutive rate cut by the Federal Open Market Committee (FOMC) in October, the robust spending data and improving labor conditions led traders to reduce expectations for a December rate cut. Additionally, yields found support as the Federal Reserve maintained its pace of quantitative tightening, despite the reduction in its overnight reverse repo facility.