U.S. Treasury yields fell across the curve on Thursday as traders reacted to Fed Governor Christopher Waller saying he was leaning toward keeping interest rates on hold at the next policy meeting in two weeks.
Investors were also hoping Friday’s release of August nonfarm payrolls would be the next key indicator of labor market conditions.
The drop in yields comes after rising relentlessly over the past month on growing concerns about debt levels, inflation and rising global energy prices. Yields hit multi-year highs on Wednesday.
of 10 year Treasury bill Yields, a key measure of mortgage, auto loan and credit card debt, fell more than 2 basis points to 4.7680%. longer date 30 year treasury Yields, which are sensitive to geopolitical events, also fell by 2 basis points to 5.2433%.
the shorter the 2 year Treasury bill Yields, which tend to be tied to the Federal Reserve’s short-term interest rate decisions, also fell by more than 2 basis points to 4.3609%.
One basis point equals 0.01%, or 1/100 of 1%. Yield and price are inversely proportional to each other.
Federal Reserve President Christopher Waller said Thursday that he is leaning toward keeping interest rates on hold at the central bank’s September meeting unless there are surprises in future inflation data.
In contrast to remarks made by Fed Chairman Kevin Warsh last week, Waller expressed confidence in current inflation trends, saying the impact of tariffs is likely contained and rising energy prices are not having a significant impact on other parts of the economy.
He acknowledged that inflation is “well above” the Fed’s 2% target, but noted that recent trends “suggest that we are finally starting to see signs of deinflation.”
Investors will also be keeping an eye on Friday’s nonfarm payrolls and August unemployment rate, with employment expected to increase by 58,000 and the unemployment rate to hold steady at 4.1%.
By then, the latest ISM Services PMI data, which provides a monthly snapshot of U.S. services sector activity, is expected to be released on Thursday and is expected to read 54.3, up slightly from July’s 54.1.
Hostilities elsewhere in the Middle East loom over markets after Iran launched a missile and drone attack on Kuwait, with President Donald Trump saying the current escalation in tensions won’t last “for much longer.”
West Texas Intermediate Futures October deliveries fell more than 0.5% in early trading and remained above $90 a barrel, while global oil benchmarks brent crude oil It last traded down 0.6% at $95.07.
— With additional reporting by CNBC’s Jeff Cox
