FX.co ★ US 10-Year Yield Pressured by Fed Rate Cut Bets

The yield on the 10-year US Treasury note remained steady around 4.29% on Wednesday, experiencing some downward pressure amidst rising expectations for a Federal Reserve interest rate reduction next month. This anticipation follows the latest US inflation report, which showed that headline inflation stalled at 2.7%, contrary to projections of an increase to 2.8% due to tariff impacts. Meanwhile, core inflation rose to 3.1%, marking its highest point in six months. Currently, market analysts are predicting a 94% likelihood of a 25-basis-point interest rate cut in September, with the possibility of an additional reduction by the end of the year also being considered. Further adding to the market's uncertainty, White House spokeswoman Karoline Leavitt revealed that President Donald Trump is contemplating legal action against Federal Reserve Chair Jerome Powell concerning the management of renovations at the central bank's headquarters, which has sparked concern about the Fed's operational independence.