FX.co ★ US 10-Year Yield Extends Rebound

On Monday, the yield on the 10-year US Treasury note increased for the second consecutive session, surpassing the 4.43% threshold. This rise is attributed to ongoing macroeconomic and geopolitical factors that perpetuate inflationary pressures, thereby dampening expectations for any dovish signals from the Federal Reserve this week. The growing tensions between Israel and Iran have propelled energy prices upwards, heightening the risk of a widespread global inflation increase, particularly if disruptions in energy supply from the region occur. Meanwhile, the Federal Open Market Committee (FOMC) is anticipated to keep interest rates steady on Wednesday. Policymakers have previously indicated that uncertainties surrounding the US economic outlook, mainly due to the ambiguous future of trade and fiscal policies, will deter them from instituting decisive policy changes. Currently, rate futures indicate that the market anticipates two rate cuts this year. The Summary of Economic Projections, to be released alongside the Fed's rate decision, will provide insights into how policymakers' perspectives diverge from those of Wall Street.