FX.co ★ Treasury Yields Edge Up

The yield on the U.S. 10-year Treasury note slightly increased to approximately 4.16% on Monday. This rise follows a dip to two-week lows the previous week, as investors continue to evaluate the outlook of monetary policy and brace for a busy schedule of Treasury auctions. The auction series begins later today with a $69 billion offering of 2-year notes, followed by a $70 billion auction of 5-year notes on Tuesday, and culminating with a $44 billion auction of 7-year notes on Wednesday. In terms of monetary policy, markets are currently predicting two rate cuts by the Federal Reserve in 2026, spurred by a lower-than-anticipated inflation reading for November and President Trump’s advocacy for more relaxed monetary policies. Despite this, Federal Reserve officials hold differing views on the future direction. On Sunday, Cleveland Fed President Hammack indicated that the current policy stance is appropriate for a pause, while Governor Miran has argued that further easing might be necessary, pointing to signs of cooling inflation.