The US 10-year Treasury yield increased to 3.633%, its highest level since May 2023, as traders reviewed the most recent retail sales data ahead of the Federal Reserve’s announcement.
Retail sales in the United States increased 0.1% in August, compared to projections of a 0.1% decrease. However, sales excluding automobiles and gasoline fell short of expectations.
The report comes as Federal Reserve policymakers begin a two-day meeting to determine how much to decrease interest rates, which are now at a two-decade high of 5.25%–5.5%.
The market is already pricing a 25 or 50 basis point rate drop in September, with the greater reduction intended to avert additional labor market weakness.
Analysts said the Federal Reserve’s upcoming first interest rate cut, which is widely expected at Wednesday’s meeting, should support fixed income.
5.5%,The Federal Reserve is getting ready to cut interest rates this week for the first time in about four years. Presently, the benchmark rate in the US is sitting at 5.5% but expectations point to a cut in the ballpark of 25 basis points to 50 basis points.
