10-Year Treasury Yields Slip To 4% For First Time Since April
New inflation data helped drive down yields on 10-year Treasury bonds to 4% Thursday morning ahead of a highly anticipated Federal Reserve meeting next week.
It’s the first time since April that the yield on 10-year Treasury notes hit 4%, although it has bounced slightly higher in trading Thursday.
Yields for 10-year Treasurys have fallen since the start of the month, a welcome sign for commercial real estate owners with floating-rate loans and investors hoping for a better credit environment.
Overall inflation was at 2.9% in August, with core inflation, which strips out volatile sectors like food and energy, at 3.1%, according to consumer price index data released Thursday by the Bureau of Labor Statistics.
The reading, which puts overall inflation at its fastest pace since the start of the year, was aligned with investors’ expectations. And the closely watched data comes a week before the Federal Reserve meets to decide whether to cut its benchmark rate.
A rate cut was already widely expected, and the CPI print has further solidified investor sentiment that a rate cut is coming. Inflation is still well above the Fed's longstanding 2% target rate, but analysts say weak hiring in recent months and steep revisions to jobs data have likely shifted how the Fed is approaching its dual mandate of maximum employment and stable prices.
In addition to lackluster job growth in August, the Labor Department also revised its data for 2023 and early 2024, erasing 818,000 jobs from its total. In updated data released this week, the Labor Department said employers added 911,000 fewer jobs than previously reported in the year ending March 2025.
Uncertainty injected into the economy by President Donald Trump’s economic, trade and immigration policies have sapped both consumer and business confidence, leading corporations and developers to delay decisions.
Yields on 10-year Treasury bonds started September at around 4.23% and slid throughout the month to 4.013% early Thursday.
At least some of the retreat in yields reflects the near-universal consensus that the Fed will cut its benchmark rate Wednesday.
Roughly 90% of investors expect the Fed to cut rates by 25 basis points, according to CME Group’s Fed Watch tool. The remaining 10% expect a 50-basis point cut, a prediction that wasn’t even on the table a month ago before the downward revisions in economic data.
Both the Fed and the collectors of the data it relies on to measure the economy have faced unprecedented political pressure in recent months.
After the August revisions to jobs data, Trump fired the commissioner of the U.S. Bureau of Labor Statistics. The White House has proposed reducing the frequency of data reporting, a proposition that has drawn puzzled rebukes from the business community.
Trump and his allies have spent months attacking Fed Chairman Jerome Powell and calling for his resignation, which the head of the central bank has consistently dismissed. Republicans have since turned their focus to Fed Governor Lisa Cook, who has been accused of mortgage fraud by Bill Pulte, the head of the Federal Housing Finance Agency.
Trump moved to fired Cook, who the Department of Justice announced is under criminal investigation, for the alleged fraud. She has refused to resign and sued to keep her post.
The Trump administration believes the Fed has moved too slowly to cut interest rates, with Powell being a subject of the president's penchant for nicknames.
“Jerome ‘Too Late’ Powell should have lowered rates long ago. As usual, he’s ‘Too Late!’” the president posted to Truth Social on Sept. 5, his most recent post about the Fed chair.
