FX.co ★ US 10-Year Yield Holds Decline on Powell Comments

The yield on the 10-year US Treasury note remained stable at approximately 4.27% on Monday, following a decline of nearly 10 basis points in the previous session. This drop occurred after Federal Reserve Chair Jerome Powell's remarks at Jackson Hole, which suggested the possibility of a rate cut at the central bank's upcoming meeting. Powell noted that, notwithstanding low unemployment, there are emerging risks to the labor market, and the current monetary policy is still "restrictive," implying that policy adjustments could be necessary. He also highlighted the impact of modifications in tax, trade, and immigration policies on the economic landscape. Market expectations have now risen to an 87% likelihood of a 25 basis point rate cut in September, up from around 75% the previous week. Investors are now awaiting Friday's release of the July personal consumption expenditures price index, the Federal Reserve's preferred measure of inflation, for further guidance on policy decisions.