FX.co ★ US 10-Year Yield Drops to 3-Month Low

The 10-year US Treasury note yield fell to a three-month low of 4.22% on Monday, maintaining nearly a 20 basis point decline since the previous session's peak. This drop came after revised employment data indicated a much weaker labor market than initially thought. The Bureau of Labor Statistics adjusted its figures, removing over 250,000 nonfarm payrolls from the totals for the past two months, highlighting vulnerabilities in the labor market as July's numbers fell short of expectations. Furthermore, the ISM reported the largest decline in manufacturing employment this year, underscoring the negative effects of tariff threats and uncertain economic policies on the US workforce. These developments have prompted markets to reassess their forecasts for a Federal Reserve rate cut in September, with projections now considering two potential rate cuts this year. Adding to the downward pressure on yields, the Treasury revealed plans to increase the volume of buybacks on notes, bonds, and Treasury Inflation-Protected Securities (TIPS).