FX.co ★ Treasury Yields Edge Down Following Comments from Fed Governor Waller

The yield on the US 10-year Treasury note slipped to 4.74% on Thursday, extending a modest decline from the previous session after having climbed to 4.81% earlier in the week, its highest level since October 2023. Treasuries found support following remarks from Fed Governor Waller, who said that “if there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level.”

A recent easing in oil price gains also helped temper worries about mounting inflationary pressures. Market pricing now implies roughly a 50% chance of a Federal Reserve rate hike this month, down from about 70% earlier in the week, when a sharp rise in oil prices intensified inflation concerns and followed Fed Chair Warsh’s pledge at the Jackson Hole Symposium to keep inflation under control.

Investors are now focused on Friday’s jobs report for fresh insight into the labour market, while the next key inflation data releases are due next week.