29.08.202513:38:01UTC+00US Yield Rise After PCE Data

On Friday, the yield on the 10-year US Treasury note climbed to 4.24%, rebounding from earlier two-week lows of 4.3%. This increase was driven by further evidence pointing to the resilience of the US economy. Recent data from the Bureau of Economic Analysis (BEA) indicated that personal income and spending for July rose from the previous month, aligning with market expectations and highlighting a strong economy at the quarter's turn, particularly as President Trump reduced tariff threats. Concurrently, core Personal Consumption Expenditures (PCE) prices, the Federal Reserve's preferred measure of underlying inflation, rose to an annual rate of 2.9%. Despite the data, rate futures still suggested a general consensus that the Federal Reserve is likely to lower interest rates by 25 basis points at its upcoming September meeting, with a total of two cuts anticipated for the year, a shift from earlier predictions of three. Nonetheless, apprehensions persisted that a dovish shift by the Fed next year could hinder inflation's return to the 2% target, thereby continuing to steepen the US yield curve.