US Treasury yields dip as Fed rate cut expectations firm
US import prices fall 0.4% in September
Markets price in 96.3% chance of 25 bps rate cut at next Fed meeting
Retail sales data on Thursday eyed
By Chuck Mikolajczak
NEW YORK, Oct 16 (Reuters) -U.S. Treasury yields were modestly lower on Wednesday, with the benchmark 10-year note yield down for a third straight session as investors locked in expectations for the path of Federal Reserve rate cuts ahead of data on consumer strength.
The 10-year yield had risen for four straight weeks, reaching 4.12% last week, its highest since July 31, in the wake of a strong payrolls report that diminished expectations for another outsized rate cut of 50 basis points (bps) from the Fed at its November policy meeting.
Labor Department data on Wednesday showed import prices slipped 0.4% last month, the biggest drop since December 2023, after a revised 0.2% decrease in August, amid a sharp decrease in the cost of energy products and indicating a benign inflation outlook that keeps the Fed on course to continue cutting interest rates.
The data comes ahead of retail sales figures on Thursday that will shed light on the health of the consumer.
"Most likely if they come around expectations, it's supportive of a still resilient and strong consumer, so not pointing to the need for super fast rate cuts," said JoAnne Bianco, BondBloxx partner and client portfolio manager in Chicago.
"We translate this into our view of where we think value is in the markets and we think the backup in yields that we've seen really has represented an opportunity for investors to increase their allocation to fixed income."
Markets are now pricing in a 96.3% chance for a cut of 25 bps at the Fed's next meeting, with only a 3.7% chance the central bank will hold rates steady, according to CME's Fedwatch Tool. Expectations for a 50 bps cut were at 29.3% a month ago.
The yield on the benchmark U.S. 10-year Treasury note US10YT=TWEB fell 2.4 basis points to 4.014%.
Comments from Fed officials, including Chair Jerome Powell, have signaled a shift in focus from combating inflation to labor market stability while also being deliberate in the path of future rate cuts.
The yield on the 30-year Treasury bond US30YT=RR slipped 3 basis points to 4.298%.
Atlanta Federal Reserve President Raphael Bostic said late on Tuesday he penciled in just one more interest rate reduction of 25 basis points this year when he updated his projections for last month's U.S. central bank meeting.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, was at a positive 7.4 basis points.
The two-year US2YT=TWEB U.S. Treasury yield, which typically moves in step with interest rate expectations, fell 1.8 basis points to 3.938%.
The breakeven rate on five-year U.S. Treasury Inflation-Protected Securities (TIPS) US5YTIP=TWEB was last at 2.219% after closing at 2.226% on Oct. 15.
The 10-year TIPS breakeven rate US10YTIP=TWEB was last at 2.273%, indicating the market sees inflation averaging about 2.3% a year for the next decade.
Monthly change in US Import Price Index https://reut.rs/3UaJsr9
Reporting by Chuck Mikolajczak; Editing by Andrea Ricci
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.
