The yield on the US 1-year Treasury note remained below 4.4% on Thursday, continuing its retreat from the 4.5% level reached earlier in November as markets balanced heightened demand for safe assets with expectations of a less dovish Federal Reserve.
US 10-year yield eases further
Multiple Ukrainian strikes on Russian territory using Western-made missiles raised concerns about broader military escalation, especially as Moscow updated its doctrine to make the use of nuclear weapons more likely. This uncertainty prompted investors to seek refuge in Treasury securities and gold.
Fed may pause cuts
However, Fed Funds futures indicated that an increasing portion of the market is scaling back expectations for a Federal Reserve rate cut next month, as persistent inflation and signs of a resilient economy support a more hawkish stance from the FOMC. The latest data showed that initial unemployment claims unexpectedly dropped to their lowest level since April, although higher outstanding claims aligned with the slowdown in hiring.
