FX.co ★ US 10-Year Yield Rebounds

The yield on the 10-year US Treasury note exceeded 4.26% on Tuesday, reversing the significant drop that reached a two-month low of 4.19% earlier in the day. This movement was driven by newly released data that bolstered arguments against the Federal Open Market Committee (FOMC) instituting a rate cut this month. The JOLTS report showed that job openings increased more than anticipated in May, supporting expectations of a robust employment report later in the week. Furthermore, while the ISM Manufacturing PMI remained in contraction, as forecasted, its price index surprisingly stayed close to a three-year high, posing a risk to the progress made towards disinflation within the US economy. Over 75% of market participants are betting on the Federal Reserve maintaining current rates at the end of July. However, slightly more than half of the market anticipates that the Fed will implement more than two rate cuts this year. Fiscal concerns persist regarding US debt, as the Senate considers passing President Trump's tax proposal, which is expected to increase the national debt by $3.3 trillion.