FX.co ★ US 10-Year Yield Inches Down

The yield on the 10-year US Treasury note decreased to 4.15%, following a recent peak of 4.2%, marking a four-month high earlier this week. This movement comes as investors closely assess the extent of interest rate cuts anticipated by the Federal Reserve for this year. Recent data revealed that both headline and core producer prices restrained from surpassing expectations in November, consistent with a more subdued CPI report released earlier. These findings reinforce the prevailing market belief that the Federal Reserve may implement two to three interest rate cuts this year, as predictions of disinflation allow policymakers the flexibility to focus on an increasingly stagnant labor market. Concurrently, President Trump instructed Freddie Mac and Fannie Mae to acquire $200 billion in mortgage-backed securities, potentially boosting demand for long-term fixed-income assets. Meanwhile, robust retail sales figures continue to support the perception of healthy consumer spending within the US economy.