US Treasury yields were mixed today. The 10-year note yields were relatively stable after increases on Friday and Monday and hovered near the 4.4% mark, while 2-year note yields were slightly above the key level of 4.75%.
The ongoing scrutiny of economic data updates and the impending July 4th holiday could dampen market movements.
Federal Reserve Chair Jerome Powell reiterated a cautious stance on interest rate adjustments, emphasising the importance of clearer inflation indicators before any rate cuts are considered, which could help leave yields near the top of their range over the short term.
At the same time, expectations continue to point to a rate cut by September and remained broadly unchanged, which could also contribute to keeping Treasury yields capped in the near term.
Speculation about former President Donald Trump’s potential return triggered increased bets on shorter-maturity Treasury notes. This led to significant rises in open interest and could continue to fuel an increase in yields for longer maturities. As a result, more volatility could be recorded for the latter.
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