U.S. Treasury Yields Drop Following Fed Chair Powell’s Rate Cut Remarks
U.S. Treasury yields fell on Thursday after Federal Reserve Chairman Jerome Powell suggested a possible rate cut in September.
Key Developments
- Treasury Yields Movement:
- The 10-year Treasury yield decreased by more than five basis points to 4.0526%.
- The 2-year Treasury yield fell by over four basis points to 4.2881%.
- Yield and Price Dynamics:
- Yields and prices move inversely; a decline in yields indicates an increase in Treasury prices. Each basis point is equivalent to 0.01%.
Treasury Yield Data
| Ticker | Description | Yield | Change |
|---|---|---|---|
| US1M | U.S. 1 Month Treasury | 5.357% | -0.012% |
| US3M | U.S. 3 Month Treasury | 5.271% | -0.006% |
| US6M | U.S. 6 Month Treasury | 5.102% | -0.008% |
| US1Y | U.S. 1 Year Treasury | 4.752% | -0.036% |
| US2Y | U.S. 2 Year Treasury | 4.282% | -0.054% |
| US10Y | U.S. 10 Year Treasury | 4.055% | -0.049% |
| US30Y | U.S. 30 Year Treasury | 4.325% | -0.042% |
Fed Chair Powell’s Comments
- Rate Cut Possibility:
- Powell indicated that the Fed might reduce rates in September if economic conditions warrant it. He stated, “The broad sense of the committee is that the economy is moving closer to the point at which it would be appropriate to reduce our policy rate.”
- The Fed’s decision will be influenced by a range of factors including economic data, inflation, labor market signals, and overall expectations.
- Current Fed Stance:
- The Federal Reserve left interest rates unchanged in its recent meeting. Three more Fed meetings are scheduled for the remainder of the year.
Upcoming Economic Reports
- Bank of England:
- The Bank of England is expected to announce its latest interest rate decision later on Thursday. Analysts are anticipating a potential rate cut, but uncertainty remains as the BOE has not provided clear indications.
- U.S. Economic Data:
- Initial jobless claims data will be released on Thursday, followed by the July jobs report on Friday, which will include updates on nonfarm payrolls and unemployment figures.
- Additional insights from the manufacturing sector are also expected to be reported on Thursday.
