FX.co ★ US 10-Year Yield Pulls Back From 3-Year High

The yield on the 10-year US Treasury note hovered around 4.78% on Thursday, retreating from three-year highs as investors continued to reassess the Federal Reserve’s policy outlook. New York Fed President John Williams noted further evidence that inflation is easing as the impact of past tariffs wanes, while higher energy costs have not yet spilled over broadly into other services. Data released on Wednesday also showed that US private-sector employment growth slowed in August.

Even so, markets are still pricing in roughly a two-thirds probability of a Fed rate increase later this month, following Chair Kevin Warsh’s hawkish remarks on Friday. Investors are now awaiting the latest weekly jobless claims figures on Thursday and Friday’s August nonfarm payrolls report for additional clarity on the strength of the US labor market. Elsewhere, oil prices paused their recent rally after President Donald Trump suggested that the latest attacks on Iran would be short-lived, helping to temper inflation concerns.