The yield on the 10-year US Treasury note slipped below 4.4% on Thursday after briefly touching a nine-month high of 4.45% in the previous session, as benchmark energy prices retreated from recent peaks and investors digested a new round of economic data. Long-term yields eased even as tensions between Iran and the US kept energy exports from a key producing region suspended, with oil and refined product prices swinging sharply from their highs.
Fresh data showed that US consumer spending slowed in the first quarter, though a surge in AI-related investment helped keep GDP growth at a 2% annualized pace. Despite the latest pullback, the 10-year yield remains significantly higher on the year, as persistent inflation pressures in a resilient economy have largely extinguished expectations of a Fed rate cut in 2024. Core PCE inflation accelerated in March, and initial jobless claims fell to their lowest level in nearly 50 years. This followed a split tone from Fed officials, with several regional Federal Reserve presidents pushing back against adopting an easing bias at yesterday’s FOMC meeting, where rates were left on hold.
