The 10-year Treasury yield saw a slight uptick on Friday, closing a week marked by significant inflation data and Federal Reserve Chair Jerome Powell’s remarks indicating a more cautious approach to future rate cuts. The U.S. benchmark yield rose over 3% for the week, signaling investor reactions to economic developments.
Treasury Yields See Minor Increases
As of Friday, the 10-year Treasury yield increased by roughly two basis points to 4.439%, while the 2-year Treasury note yield stood at 4.31%, up by nearly two basis points. This marks a rise from last week’s close of 4.31% for the 10-year and 4.25% for the 2-year yield. Yields move inversely to bond prices, reflecting shifts in market sentiment.
Treasury Yield Overview:
- 10-Year Yield: 4.445%, up by 0.025 points
- 2-Year Yield: 4.307%, up by 0.013 points
- 30-Year Yield: 4.623%, up by 0.04 points
Fed’s Cautious Stance on Rate Cuts
During a speech in Dallas, Fed Chair Jerome Powell emphasized the central bank’s intent to avoid hastily reducing interest rates. Citing robust U.S. economic growth, Powell noted that the Fed’s current posture allows for a more measured approach to policy decisions. “The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell stated.
Supporting this sentiment, Boston Fed President Susan Collins told The Wall Street Journal that a December rate cut wasn’t guaranteed. This view was reflected in the Fed funds futures, showing a 62% probability of a quarter-point rate cut at the December meeting and a 38% chance of holding rates steady. The current target range for the Fed rate stands at 4.5%-4.75%.
Economic Data Signals Steady Growth
October’s consumer price index (CPI) data reported a 0.2% monthly increase, aligning with expectations and bringing the annual inflation rate to 2.6%. Core CPI, which excludes food and energy, grew by 3.3% year-over-year, still above the Fed’s 2% target. Additionally, jobless claims for the week ending Nov. 9 fell by 4,000 to 217,000, underlining strong labor market conditions.
Retail sales in October also provided a positive signal, with a 0.4% increase, slightly surpassing the 0.3% forecast by Dow Jones economists.
