US 10-Year Yield Stabilizes Ahead of Inflation Data

The yield on the 10-year US Treasury note held near 4.1% on Monday, pausing a three-day slide as investors awaited two key inflation reports this week that could influence the near-term rates outlook after weaker jobs data last week. The producer price index is due Wednesday, followed by the consumer price index on Thursday. On Friday, the benchmark yield fell to a five-month low after data showed nonfarm payrolls rose just 22K in August, well below an upwardly revised 79K in July and market expectations of 75K, underscoring labor market weakness. The downbeat figures aligned with dovish comments from FOMC officials, who recently emphasized the need to adjust policy for a slowing economy and jobs market. Markets have nearly fully priced in a 25 basis point Fed rate cut later this month, with some betting on a larger half-point move depending on this week’s inflation results.