FX.co ★ Treasury Yields Hold Amid Trump-Zelensky Meeting

The yield on the 10-year US Treasury note remained above 4.3% on Monday, as market participants evaluated the importance of a significant meeting in Washington between US President Donald Trump and Ukrainian President Volodymyr Zelensky. Investors are also anticipating the upcoming Federal Reserve’s Jackson Hole symposium later in the week. During their engagement in the Oval Office, President Trump expressed optimism for a swift resolution to the conflict, promised US security assistance, and indicated plans to contact Russian President Vladimir Putin following discussions with Zelensky and European leaders. This highlights the meeting’s geopolitical and market relevance. Despite a lack of a ceasefire agreement after Friday's talks with Putin, Russia consented to allow the US and Europe to offer Ukraine substantial security guarantees as part of any future peace agreement. In terms of monetary policy, the market has priced in an 83% probability of a 25 basis point interest rate cut by the Federal Reserve in September. Nevertheless, stronger-than-expected figures in producer inflation and retail sales have tempered expectations for a more significant 50 basis point reduction.