FX.co ★ US 10-Year Yield Holds Steady

The yield on the 10-year US Treasury note remained at 4.09% on Friday, following a recovery the previous day, as investors assessed the Federal Reserve's monetary policy outlook in anticipation of crucial inflation data. Currently, markets anticipate an 87% likelihood that the Fed will implement a 25 basis point rate reduction next week, with an additional 2–3 cuts projected for the following year. The prospect of a more dovish stance gained further traction with reports suggesting that economic adviser Kevin Hassett might replace Fed Chair Powell in May, a change that could indicate a shift towards more assertive policy easing. In other developments, the Challenger report showed that layoffs increased to 71,321 in November, marking the highest level for that month since 2022, while initial jobless claims fell to the lowest in over three years last week. Investors now turn their attention to the delayed September personal consumption expenditures index, the Fed’s favored measure of inflation, along with consumer spending and income data.