US yields fall as investors look for safety and bet on pause in rate hikes
TLT•The 10-year Treasury yield fell 12.8 basis points to 5.062%, while traders saw a 71% chance the Federal Reserve would hold rates steady at its October meeting. Yields declined despite September producer prices posting their biggest increase in 4-1/2 years.
1. Treasury yields decline
Longer-dated US Treasury yields fell to their lowest levels since September 23 on Thursday, as investors sought safety amid concerns about slowing AI growth and bets the Federal Reserve would pause rate hikes. The 10-year yield was down 12.8 basis points at 5.062%, and the 30-year yield fell 12.1 basis points to 5.403%. The two-year yield declined 7.9 basis points to 4.723%.
2. Fed rate expectations
September producer prices rose by the most in 4-1/2 years, while retail sales increased more than expected, partly due to higher gasoline prices. San Francisco Fed President Mary Daly said the central bank would probably need to raise short-term rates further to curb inflation but signaled no need to do so at its October 27-28 meeting. Traders saw a 71% chance of rates holding steady in October and a 91% chance of a hike in December.
