FX.co ★ US 10-Year Yield Holds Steady

The yield on the US 10-year Treasury note remained steady at approximately 4.14% on Friday, poised to close the week with minimal fluctuations. This stability arose as investors considered the economic repercussions of the ongoing government shutdown, now entering its ninth day due to the Senate's failure to secure a funding agreement. This impasse has postponed the release of crucial economic data, which may influence the Federal Reserve's upcoming policy decisions. John Williams, President of the New York Federal Reserve, indicated his openness to another interest rate reduction; however, persistent inflationary pressures could complicate this potential action. Currently, market expectations suggest a 95% probability of a quarter-point rate cut occurring this month, while the likelihood for a similar adjustment in December has decreased to 80% from a previous 90%. Additionally, investor interest was lukewarm at the Treasury Department’s most recent 10-year note auction.