FX.co ★ US 10-Year Yield Swings Lower

The yield on the 10-year U.S. Treasury note dipped below the 4.5% threshold on Thursday, counteracting earlier gains, as emerging signs of an economic slowdown aligned with predictions of several Federal Reserve rate cuts this year. Notably, jobless claims surged more than anticipated, reaching their highest level since November 2021, suggesting increased challenges in job finding for the unemployed. Concurrently, revised data revealed a contraction in the U.S. GDP for the first quarter. Additionally, shifts in trade policy policies have continued to inject uncertainty into the economic environment following a U.S. court's decision to block a series of reciprocal tariffs initiated by President Trump on what was termed "Liberation Day." However, it remains unclear when the existing tariff measures will be lifted. Despite these developments, the 10-year note yield was set to close May 35 basis points higher, driven by economic uncertainties in the U.S. and a proposed tax bill that could potentially expand the federal deficit by nearly $4 trillion over the next decade.