FX.co ★ US 10-Year Yield Halts Decline

On Wednesday, the yield on the 10-year US Treasury note settled at 4.02%, slightly recovering from an earlier drop to a one-month low of 4%. This adjustment followed unexpectedly strong economic data. Initial jobless claims fell to their lowest point since February, while a delayed durable goods orders report indicated ongoing growth. These outcomes challenged previous expectations of an impending Federal Reserve rate cut next month, especially as weekly ADP employment figures showed another decline and a key consumer confidence index recorded a sharp deterioration. Additionally, Treasuries found support as headlines emerged suggesting that NEC Director Hassett, a strong advocate for dovish monetary policy, is leading the race for the Fed Chair position next year. At the same time, the FDIC was poised to ease the enhanced Supplementary Leverage Ratio (SLR) rules, potentially allowing major banks to increase their holdings of Treasuries.