he yield on the 10-year US Treasury note held its recent decline to around 4.61% on Friday, on track for its largest weekly decline since late November. The drop followed a surprise decline in US core inflation, which bolstered expectations for further Federal Reserve interest rate cuts this year. Fed Governor Christopher Waller also indicated on Thursday that three or four rate reductions remain possible if economic data weakens further. Additionally, December’s US retail sales came in below expectations, though they still pointed to solid consumer spending. Markets are now pricing in a total of 41 basis points in total easing from the Fed this year, a notable increase from the 27 basis points priced in earlier this month. Still, the Fed is widely expected to hold rates steady later this month.
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