FX.co ★ US 10-Year Yield Steadies as Fed Outlook Mulled

The yield on the US 10-year Treasury note held near 5.3% on Thursday after easing in the previous session, as the latest FOMC minutes reinforced a hawkish bias among policymakers amid persistent inflation risks. Records from the Federal Reserve’s September meeting showed that all 19 officials backed that month’s rate increase, and most judged that another hike would likely be appropriate before year-end.

Markets largely expect the Fed to keep rates unchanged this month, while futures currently price in about a 78% chance of a hike in December. Investors are now awaiting the latest weekly US jobless claims for additional signals on labor market conditions. At the same time, worries over a potential escalation in tensions between the US and Iran, together with ongoing threats to oil supply from the Middle East, have kept crude prices elevated and inflation risks heightened.