US 10-Year Yield Holds Increase
On Monday, the yield on the 10-year US Treasury note remained around the 4.3% mark, continuing its rise from the previous week. This stability reflects ongoing market concerns regarding potential inflationary pressures in contrast with economic anxieties stemming from tariffs imposed by the Trump administration. Despite these challenges, the latest job report suggests that the labor market has been relatively robust, even amid the economic disruptions caused by tariffs. These disruptions are evident from the GDP contraction in the first quarter, a significant increase in goods imports prior to tariff imposition, and the subsequent decline in port activity. The uncertainty regarding the future trajectory of the US economy and whether Trump will extend the tariff measures has led markets to a consensus that the Federal Reserve is likely to keep interest rates unchanged this week. Although fears of economic contraction have prompted rate futures to hint at multiple rate cuts by the Fed this year, inflation concerns have somewhat diminished support for US Treasuries. Additionally, the lack of clarity in economic policy may adversely affect the US's unique standing in capital markets.
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