“The US 10-year bond yield is still rising above 4.4% after the US revealed higher-than-expected non-farm employment numbers. Which will be a factor causing the US Federal Reserve to keep interest rates high for longer than expected.”
The latest 10-year US government bond yield (US bond yield) is 4.470%, while the 30-year government bond yield is 4.579%.
Investors are watching US inflation numbers. and the Federal Reserve's monetary policy meeting on June 11-12, including remarks by Mr. Jerome Powell, Chairman of the Federal Reserve, after the meeting. To find signs indicating the direction of US interest rates after the European Central Bank (ECB) decided to cut interest rates by 0.25%, this is the first interest rate cut in nearly 5 years or since September 2019.
In addition, the market is watching the official interest rate forecasts (Dot Plot) of Federal Reserve officials. To find signs indicating the first interest rate cut by the Federal Reserve this year. Revealed at the March meeting, the Fed indicated 3 interest rate cuts in 2024, each by 0.25% for a total of 0.75%, unchanged from the original signal of 3 interest rate cuts at the December 2023 meeting.
Investors expect that the Fed will postpone interest rate cuts at its September meeting until November. This will be the first interest rate cut. The only time this year the Fed will release strong employment numbers will be a factor that prompts the Fed to keep interest rates high for longer than the market expected.
CME Group's latest FedWatch tool indicates that investors are 51.0% biased towards the Fed keeping interest rates at 5.25-5.50% at its September meeting. The probability is only 45.0% to reduce interest rates by 0.25% to the level of 5.00-5.25%.
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