FX.co ★ US 10-Year Treasury Yield Pulls Back after Fed Minutes

On Tuesday, the yield on the 10-year US Treasury note was reduced to 4.125%, approaching its lowest point in over three weeks. This adjustment came as investors evaluated the Federal Reserve's policy direction following the release of minutes from its December meeting. The minutes indicated that a majority of Federal Open Market Committee members anticipate potential interest rate reductions next year, contingent on continued cooling of inflation. Nonetheless, policymakers are split on the associated risks. Some express concern about the potential for inflation to become persistent, necessitating a more stringent policy approach, while others advocate for further rate cuts to bolster an easing labor market. During December, the Federal Reserve reduced rates by 25 basis points to a range of 3.5%–3.75%, marking the year's third rate cut, albeit amid differing opinions within the committee. The Fed's projections also reflected increased optimism regarding economic growth. Additionally, markets are closely monitoring the forthcoming appointment of the next Federal Reserve chair.