Treasury Yields Dip as Inflation Data Looms

Treasury Yield

Bloomberg – On Tuesday, there was a noticeable drop in the yield of the 10-year US Treasury note, dipping below 4.2%. This movement brings it close to the lowest levels seen in three months. This change comes as traders are eagerly awaiting the upcoming US inflation data, which is expected to shed light on the Federal Reserve’s (Fed) future actions. The main inflation figure is predicted to have slowed down again, yet the core inflation rate might still show some persistence.

In the meantime, the Fed is likely to keep its funds rate steady in its upcoming decision, challenging the expectations of a rate cut. This stance is supported by the labor market’s unexpected resilience against the backdrop of high-interest rates. The US economy added 200,000 jobs in November, surpassing the 180,000 jobs predicted by market analysts. Additionally, in a surprising turn, the unemployment rate fell to 3.7%.