FX.co ★ Treasury Yields Stabilize

The yield on the US 10-year Treasury note remained stable at approximately 4.43% on Tuesday, following a turbulent session on Monday when the benchmark briefly reached a one-month peak. Investors are continuing to assess the US fiscal and economic outlook amidst escalating concerns. Just last Friday, Moody's downgraded the US credit rating from Aaa to Aa1, effectively removing the government's last triple-A rating from a major international agency. This downgrade was attributed to worries over increasing government debt and a widening budget deficit. The fiscal concerns were further exacerbated by the recent passage of President Trump’s tax-cut legislation through a crucial congressional committee. Meanwhile, officials from the Federal Reserve are maintaining a cautious approach. New York Fed President John Williams and Atlanta Fed President Raphael Bostic have both suggested that policymakers are unlikely to consider reducing interest rates in the near term. Currently, markets are anticipating two 25-basis-point rate reductions by the end of the year, potentially occurring in September and December.