FX.co ★ US 10-Year Yield Holds Retreat

The yield on the US 10-year Treasury note hovered around 4.76% on Friday, retreating from three-year highs as traders pared back expectations of a Federal Reserve rate hike this month following dovish comments from a Fed official. Governor Christopher Waller indicated he would support leaving rates unchanged if inflation pressures continue to moderate, emphasizing that his next policy decision will be heavily shaped by August inflation data due next week. Market pricing now implies roughly a 50% chance of a September rate increase, down from about 63% the previous day. Investors are also looking to Friday’s August employment report for additional guidance on the Fed’s policy path. At the same time, oil prices were set for a strong weekly advance amid persistent tensions in the Middle East and rising uncertainty over shipping through the Strait of Hormuz, keeping inflation risks firmly in focus.