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The yield on the U.S. 10-year Treasury continued to decline on Monday, following Federal Reserve Chair Jerome Powell’s remarks that hinted at a potential rate cut in the near future. The 10-year Treasury yield dropped by 3 basis points, settling at 3.778%, while the 2-year Treasury yield fell by 2 basis points to 3.891%.
These declines follow a broader downward trend that began last week when Powell made comments at the Jackson Hole symposium, signaling that the time might be ripe for a policy adjustment. On Friday, the 10-year yield had already slipped by 6 basis points, and the 2-year yield by nearly 10 basis points.
Powell’s speech was eagerly anticipated, with the Fed chair noting that inflation has significantly decreased, and the labor market is no longer overheated. However, he stopped short of guaranteeing a rate cut at the Fed’s upcoming meeting on September 18, emphasizing that any decisions would be guided by incoming data and the broader economic outlook.
Yields and prices move in opposite directions, with one basis point equals to 0.01%.