12.02.202618:15:39UTC+0010-Year Treasury Yield Falls Toward 2-Month Low

The yield on the 10-year US Treasury note fell to 4.11% on Thursday, touching its lowest level in more than two months as investors pulled back from riskier assets. The move came amid another global shift away from speculative positions in AI-related stocks and precious metals.

Markets are now focused on tomorrow’s CPI release, which is expected to show a moderation in consumer price growth. Such a reading could clear the way for the Federal Reserve to resume interest rate cuts after holding rates steady at its first meeting of the year. Futures markets currently price in two rate cuts for 2024, with the first now anticipated in the second half of the year following stronger-than-expected January employment data.

However, uncertainty persists around possible changes to the Fed’s balance sheet strategy ahead of Kevin Warsh’s anticipated appointment as Chair in May. Warsh has previously argued against large-scale asset purchases, but has recently indicated a readiness to coordinate with the Treasury on measures aimed at easing yields.