The yield on the US 10-year Treasury note slipped to 4.84% on Monday, as investors positioned themselves ahead of a series of key economic releases this week that could shape expectations for the Federal Reserve’s next policy moves. At the same time, falling oil prices helped ease concerns about renewed inflationary pressures.
The move followed comments reported by CNN on Sunday, in which President Trump said it was “highly unlikely” he would order additional strikes against Tehran if negotiations showed progress. With geopolitical tensions appearing somewhat contained, markets are now focused on this week’s CPI and PPI data, where consensus points to an acceleration in both annual headline consumer and producer inflation.
Against this backdrop, market-implied odds of another 25 bps Fed rate hike next month are currently estimated at around 80%.