US 10-Year Yield Ends Week Above 4% as Traders Pare Rate Bets

Core Insights - Treasury yields increased as traders adjusted their expectations for a Federal Reserve rate cut in December, influenced by hawkish signals from Chair Jerome Powell and signs of economic resilience in the US [1][2] Group 1: Treasury Yields and Market Sentiment - The yield on 10-year notes closed around 4.09% after starting the week below 4%, indicating a shift in market sentiment regarding interest rates [2] - Interest-rate swap contracts related to the Fed's December meeting now suggest roughly even odds of a rate cut, reflecting a recalibration of expectations [2] - Powell's comments about further easing not being a "forgone conclusion" contributed to a market selloff, indicating a more cautious outlook among investors [2][4] Group 2: Economic Indicators and Corporate Activity - The US government shutdown has halted the release of key economic data, limiting traders' ability to make informed decisions and increasing the significance of Powell's remarks [4] - Meta Platforms Inc.'s $30 billion bond sale demonstrated robust corporate spending, which put pressure on Treasuries as investors absorbed new supply [5] - More corporate deals are anticipated in the coming week, suggesting continued corporate activity in the bond market [5] Group 3: Fed Officials' Perspectives - Dallas Fed President Lorie Logan expressed that she did not see a need to cut rates, while other Fed officials also voiced dissent against the recent rate cut [7] - The mixed signals from Fed officials contribute to the uncertainty surrounding future rate adjustments, with some indicating inflation concerns are driving yields higher [6][7]