FX.co ★ US 10-Year Yields Rebound Toward 4-Month High

The yield on the 10-year U.S. Treasury note climbed to 4.16% on Thursday, nearing the four-month peak of 4.2% that had been tested earlier in the week. This shift comes as new signs of market stability reduce the pressure on the Federal Reserve to cut interest rates. Initial unemployment claims came in significantly below forecasts, maintaining the downward trend in average claims since December. This trend reinforces the perception that the U.S. labor market has not experienced a notable rise in job losses despite an extended period of elevated interest rates. Consequently, this development eases concerns that the Fed must persist in reducing interest rates to support the labor market, a point made by more dovish members of the Federal Open Market Committee (FOMC). In a related move, President Trump has directed Freddie Mac and Fannie Mae to acquire $200 billion in mortgage-backed securities by next week, a strategy likely to bolster fixed-income assets with longer maturities.