FX.co ★ US 10-Year Yield Holds Decline

The yield on the 10-year US Treasury note hovered around 4.64% on Wednesday, after sliding nearly 10 basis points in the previous session, as a continued decline in oil prices eased inflation worries and investors weighed the impact of the Treasury Department’s expanded debt buyback program.

Oil prices fell for a third straight session, helping to temper concerns about near-term inflationary pressures. At the same time, market participants remained focused on the Treasury’s plan to at least double the size of its buybacks. Investor Stanley Druckenmiller criticized the initiative, arguing that it undermines the credibility of the Treasury market and squanders an opportunity to pursue meaningful fiscal reform.

Elsewhere, investors looked ahead to the latest reading of the US PCE price index, the Federal Reserve’s preferred inflation gauge. The release precedes Fed Chair Kevin Warsh’s speech at the annual Jackson Hole symposium on Friday, where he is not expected to offer explicit guidance on the central bank’s policy decision in September.