US 10-Year Yield Steady Ahead of PCE Data

The 10-year US Treasury yield held above 4.17% on Friday after two straight days of gains, as investors awaited the PCE price index, the Federal Reserve’s preferred inflation gauge, for fresh policy guidance. On Thursday, weekly jobless claims fell by 14K to 218K, well below forecasts, suggesting firms remain hesitant to cut staff. Revised GDP data also showed the economy grew at a 3.8% annualized pace in Q2, the fastest in nearly two years, supported by robust consumer spending. Markets still anticipate a quarter-point Fed cut in October, though expectations for total easing this year slipped to 39 basis points from about 43 earlier in the week. Softer expectations of cuts by the Fed drove yields in shorter notes to rise more than those in longer bonds, trimming the yield steepening from this quarter.