10-Year US Treasury Yield Edges Lower Amid Rate Cut Expectations and Fed Minutes Awaited

Washington | EcoPulse24

The yield on the 10-year US Treasury bond edged down slightly to approach 4.14% during Monday trading, as year-end holiday liquidity remained limited and markets continued to price in interest rate cuts for the coming year.

Investors are still expecting two further rate cuts in 2026, despite divisions within the Federal Reserve board over the appropriate policy path. Most Fed officials currently foresee only a single additional cut, reflecting uncertainty regarding the timing and pace of monetary easing amid a delicate balance between supporting growth and containing inflation.

Meanwhile, recent US GDP data showed strong annualized growth in the third quarter, bolstering confidence in the economy’s resilience and tempering market bets on swift Fed easing in the near term.

Attention is also turning to the leadership of the Federal Reserve, as President Donald Trump is expected to announce Jerome Powell’s successor in early 2026 - a move anticipated to have a direct impact on monetary policy direction, interest rate expectations, and ultimately US bond yields.

Market participants are closely watching for the release of the Federal Open Market Committee (FOMC) meeting minutes on Tuesday, seeking clearer signals on the Fed’s assessment of inflation and growth risks, as well as its readiness to proceed with rate cuts in the coming period.

The minor decline in the 10-year Treasury yield reflects ongoing caution and anticipation in fixed income markets, as monetary policy, economic data, and upcoming institutional changes at the Fed continue to intersect.