FX.co ★ US 10-Year Yield Pulls Back

The yield on the 10-year U.S. Treasury note decreased to 4.46%, retreating from the prior session's five-week peak of 4.5%. This movement came as market participants analyzed recent economic data alongside indications regarding future Federal Open Market Committee (FOMC) appointments. Retail sales surged beyond expectations, and initial unemployment claims fell unexpectedly to reach a three-month low, further highlighting the strength of the U.S. economy. Meanwhile, varied reports regarding the potential dismissal of Federal Reserve Chair Jerome Powell by President Trump influenced longer-term bond yields. The U.S. President's consistent advocacy for lower interest rates has created expectations that his prospective Fed Chair appointee might lean toward a more dovish approach, thus posing long-term inflationary risks and fostering concerns that the Federal Reserve might struggle to maintain control over yields on longer-term securities. In terms of trade, key partners such as Japan, South Korea, and the European Union remained subject to heightened tariffs as of August 1st, in the absence of any newly finalized trade agreements.