US Treasury Yields Fall for Third Straight Week

what happened

Treasury yields finished the week lower, even though they edged up late in the session. Investors sought safety amid concerns over France's government debt and ahead of a Federal Reserve decision on Wednesday, which Market Talk says is widely expected to leave rates unchanged.

Markets now price in a return to rate hikes in December, despite soft consumer sentiment and steady economic activity. Before the FOMC meeting, data on durable goods orders, housing and the Conference Board's consumer confidence index are due, while GDP and PCE figures arrive later in the week.

The 10-year yield dropped 0.110 percentage point to 4.987%, its third consecutive weekly decline. The two-year yield slipped 0.054 point to 4.680%, extending a four-week fall that is its longest since January.

why it matters

For traders, the key point is that long-dated yields keep easing while rate expectations tilt toward tightening by year-end. Yields feed into equity valuations, the dollar and corporate bond pricing, so Fed commentary and the upcoming GDP and PCE releases will be closely watched.

market impact

US bonds and dollar: lower yields and shifting Fed expectations affect rate, equity and credit pricing.

tags

instruments