FX.co ★ US 10-Year Yield Pressured by Dovish Powell Remarks

The yield on the US 10-year Treasury note declined toward 4% on Wednesday, approaching lows not seen since April, following Federal Reserve Chair Powell's remarks regarding labor market weaknesses. These comments have bolstered expectations for additional interest rate cuts. The ongoing US government shutdown, which has stalled the release of vital economic data, has added to the uncertainty and increased the appeal of safe-haven assets like Treasury notes. Currently, the market is nearly fully pricing in a quarter-point interest rate reduction for this month, with another anticipated in December and three more expected next year. Bond yields are also under pressure from rising geopolitical risks and escalating US-China tensions, following President Trump's threat of a cooking oil embargo in retaliation for China’s boycott of soybeans, prompting investors to seek refuge in Treasuries.