FX.co ★ US 10-Year Yield Rises Further

On Tuesday, the yield on the 10-year US Treasury note climbed to 4.33%, marking its highest level in three weeks. This surge was driven by robust economic data released ahead of the Federal Reserve’s meeting scheduled for the following day. Key indicators in residential construction exceeded expectations, while core retail sales sectors highlighted strong private consumption, which will be integral to the forthcoming US GDP figures. Import prices also surpassed projections, and consumer inflation expectations, as measured by the University of Michigan, soared to multi-year highs. This suggests that President Trump's series of tariff threats may already be influencing the spending habits of both households and businesses. Although the Federal Reserve plans to maintain interest rates at their current levels on Wednesday, the Summary of Economic Projections will reveal how officials are balancing inflationary risks with the growth-impeding impact of the administration's announced tariffs. The financial markets have already accounted for the possibility of two more rate reductions this year.