FX.co ★ US 10-Year Yield Rebounds Further

The yield on the 10-year U.S. Treasury note increased to 4.27% on Tuesday, recovering from a previous two-month low of 4.19% earlier in the day. This shift came amid a backdrop of fiscally dovish policies and recent data that have reduced the likelihood of an interest rate cut by the Federal Open Market Committee (FOMC) this month. The Senate has greenlit President Trump's tax legislation, projected to result in a budget deficit of $3.3 trillion over the next ten years. This bill, pending approval from the House, underscores concerns regarding the sustainability of U.S. debt levels. Concurrently, the Job Openings and Labor Turnover Survey (JOLTS) revealed a greater-than-anticipated increase in job openings for May, bolstering expectations for a robust employment report later this week. Furthermore, the ISM Manufacturing PMI continued to signal contraction in the sector, as anticipated; however, its price index unexpectedly remained near three-year highs, posing a threat to the ongoing disinflation trends within the U.S. economy. As of now, over 75% of the market anticipates that the Federal Reserve will maintain current rates at the end of July, although a slight majority expects more than two rate cuts by the Fed within the year.