The yield on the 10-year US Treasury note declined to around 4.27% on Thursday, its lowest level in seven weeks, as expectations for Federal Reserve rate cuts gained traction. Fed Chair Jerome Powell, in his second day of congressional testimony, reaffirmed that interest rates should remain steady amid concerns that tariffs imposed by the Trump administration could drive inflation higher.
However, he acknowledged that absent those tariff pressures, the Fed would likely have continued easing policy. Markets are now pricing in more than 60 basis points of rate cuts by year-end, with the next move anticipated in September. Attention is also turning to trade negotiations ahead of President Trump’s July 9 deadline, as well as efforts in Congress to finalize a tax and spending package due around the same time. On the geopolitical front, US officials expected to meet Iranian counterparts next week and the ceasefire between Iran and Israel appeared to be holding for now.
