The yield on the 10-year US Treasury note reached 4% on Monday, marking its highest level since late July. This increase follows a robust US jobs rort that has dampened expectations for imminent interest rate cuts by the Federal Reserve. In Stember, nonfarm payrolls rose by 254,000, significantly exceeding forecasts of a 140,000 increase, while the unemployment rate unexpectedly declined to 4.1% from 4.2%.
As a result, markets have discounted any possibility of a substantial 50 basis point rate cut from the Fed in November, now assigning an 85% probability to a more conservative 25 basis point reduction, according to the CME’s FedWatch Tool. Investors are keenly awaiting the upcoming Fed meeting minutes on Wednesday, followed by the consumer price index rort on Thursday and speeches from several Fed officials to further assess the rates outlook.
As of Monday, October 7, the yield on the US 10 Year Note stood at 4.03%, based on over-the-counter interbank yield quotes for this government bond maturity. Analysts predict that the yield will decline to 3.68% by the end of the current quarter, with a further estimate of 3.47% in 12 months.