FX.co ★ US 10-Year Treasury Yield Remains Flat

On the first trading day of 2026, the yield on the 10-year US Treasury remained steady at approximately 4.2%, as trading volumes were low due to the holiday season. Investors were focused on anticipating the Federal Reserve's interest rate strategy for the year, with particular attention on forthcoming economic data. Key among these is the release of December payroll figures expected next week, which will offer insights into the labor market and its potential repercussions for interest rates. This past week, the minutes from the December meeting of the Federal Open Market Committee (FOMC) highlighted an increasing inclination among policymakers to consider easing monetary policy should inflation continue to decline. However, there remains a divide among officials regarding the timing and extent of possible rate cuts. While traders are factoring in the likelihood of two rate reductions, this contrasts with the Federal Reserve's projection of just one. Additionally, market participants are keenly observing the Federal Reserve's leadership changes, as President Trump is expected to announce Jerome Powell's successor early in the year, amid ongoing speculation of a preference for a more dovish appointee.