05.02.202604:08:18UTC+00US 10-Year Yield Holds Near 5-Month High

The yield on the 10-year US Treasury note dipped slightly to approximately 4.26% on Thursday, yet remained near its peak since August. This was partly due to speculations that the Federal Reserve might refrain from cutting interest rates. Fed Governor Lisa Cook underscored concerns regarding stagnating inflation rather than a cooling labor market, suggesting she would oppose rate cuts until inflationary pressures subside. Investors also contemplated the impact of Kevin Warsh's potential nomination as Fed Chair, given his preference for a leaner Fed balance sheet and a more cautious approach to reducing rates. On the economic data front, the ADP report revealed that private sector employment growth significantly lagged behind expectations, whereas service sector activity surpassed predictions. Concurrently, the US Treasury upheld its issuance strategy for the forthcoming quarters, opting for a greater proportion of short-term bills over long-term bonds to better manage borrowing expenses amidst high interest rates.