The yield on the 10-year US Treasury note rose to 4.32% on Tuesday, up slightly from the near-one-month low of 4.28% seen the previous session, as markets evaluated the minutes from the FOMC's latest meeting and considered the potential impact of tariffs on credit demand in the US.
US 10-year yield holds above one-month low
The minutes revealed that Fed officials emphasized the need for caution in its policy normalization process, citing an uncertain economic outlook and the ongoing risk of persistent underlying inflation. While markets still lean towards a rate cut in December, they expect only a total of 50 basis points in cuts throughout 2025.
Lowering repo rate possibility
Additionally, policymakers mentioned the possibility of lowering the reverse repo rate to the lower end of the target range, as funds parked in the facility have reached their lowest level since April 2021.
