US 10-year treasury yields tumble to two-month lows on cautious remarks

US 10-year treasury yields fell on Wednesday for the third straight session to two-month lows on cautious remarks by several Fed officials.

Such remarks hurt the chances of another interest rate hike in December and boosted the odds for a rate cut in the first quarter of 2024. 

US Yields 10-year treasury yields fell 1.6% to 4.257%, the lowest since September 14, with a session-high at 4.326%. 

The yields lost 1.5% on Tuesday, the second loss in a row following bearish remarks by Fed officials. 

Cautious Remarks 

Fed member Christopher Waller, a usual hawk, said the Fed is on track to bring inflation back to the 2% target.

Fed Chicago President Austen Goolsbey said that inflation has slowed rapidly this year, while New York President John Williams lauded the recent drop in prices as monetary tightening measures bear fruit. 

US Rates

Following the remarks, odds for a US interest rate hike at the December 13 meeting stood at just zero. 

Odds for an interest rate cut by the Federal Reserve in March 2024 surged from 21.5% to 40%. 

Now investors await US GDP growth data later today, expected to clock in a 5% growth rate in the second reading, up from 2.1% in the second quarter.