US yields fall in choppy session as investors eye Fed rate hold in October
TLT•US Treasury yields fell on Friday as traders priced an 87.3% chance of a Federal Reserve pause in October and a 91.4% chance of a December hike. September industrial output rose 0.7%, while export prices increased 2.2%.
1. Yields move lower
The 10-year Treasury yield fell 1.2 basis points to 5.075%, after reaching 5.133% during the session. The 30-year yield fell 0.8 basis points to 5.42%, and the two-year yield dropped 3.6 basis points to 4.715%.
2. Data and Fed expectations
September export prices rose 2.2%, compared with expectations for a 1% increase, while industrial output gained 0.7%, against forecasts of 0.4%. Traders priced in an 87.3% chance that the Fed would hold rates at its October 27-28 meeting and a 91.4% chance of a December hike. Annex Wealth Management strategist Brian Jacobsen said there was probably not enough evidence to support an October hike, but that there could be enough by December.
