FX.co ★ US 10-Year Yield Pulls Back

The yield on the 10-year note eased to 4.25% on Wednesday, putting an end to six consecutive sessions of increases. This shift was prompted by renewed market speculation that the Federal Reserve might lower interest rates. Recent consumer price data indicated that tariffs implemented by President Trump have yet to provoke significant inflationary pressures in the US economy, bolstering predictions of reduced borrowing costs by the Fed. Market expectations, as reflected in rate futures, increasingly favor a 25 basis point reduction during the Fed's upcoming September meeting, with two-thirds of market participants anticipating a total of three rate cuts by year's end. This sentiment has gained traction throughout the month following significant downward revisions to employment figures, which have undermined perceptions of a robust labor market. On the international trade front, President Trump extended the US-China ceasefire by 90 days, thereby averting further escalation of their trade conflict.