News Digest:

The 10-year U.S. Treasury yield edged slightly lower on Wednesday as traders processed mixed signals from Federal Reserve officials. As of 6:13 a.m. ET on Oct 16, the 10-year yield had fallen by more than 3 basis points to 4.006%, while the 2-year Treasury yield dipped to 3.923%, also down over 3 basis points. Yields move inversely to bond prices, meaning the slight decline reflects increased buying activity.

The bond market reopened following the Columbus Day holiday, with investors closely analyzing comments from Fed policymakers. Minneapolis Fed President Neel Kashkari emphasized that any future rate cuts would likely be “modest,” underscoring the Fed’s data-dependent approach. Similarly, Fed Governor Christopher Waller urged caution about lowering rates prematurely.

However, San Francisco Fed President Mary Daly struck a different tone suggesting that there is still scope for the Fed to cut rates further. “We’re a long way from where it’s likely to settle,” Daly noted, adding that decisions about the pace of adjustment are key, as the neutral interest rate may ultimately be higher than before.

End Notes

Source: https://www.cnbc.com/2024/10/16/us-treasury-yields-bond-traders-digest-fed-comments.html/