FX.co ★ US 10-Year Yield Holds Decline

The yield on the US 10-year Treasury note hovered around 4.59% on Wednesday after softer-than-expected inflation data eased concerns about imminent Federal Reserve interest rate hikes. The annual US inflation rate slowed to 3.5% in June from 4.2% in May, undershooting forecasts of 3.8% as lower oil prices helped temper energy inflation. On a monthly basis, consumer prices fell 0.4%, the first decline since 2020. Meanwhile, Fed Chair Kevin Warsh reiterated the central bank’s commitment to restoring price stability in congressional testimony on Tuesday but stopped short of signaling a more hawkish policy stance. Markets continue to assign roughly a 50% probability to a Fed rate hike in September, as renewed tensions between the US and Iran have pushed oil prices higher and kept inflationary pressures in focus.