10.03.202616:25:26UTC+00US 10-Year Yield Holds Below 1-Month High

The yield on the 10-year US Treasury note hovered around 4.1%, staying below the near one-month high of 4.15% reached on March 5th, as a pullback in benchmark energy prices eased concerns about higher inflation this year. President Trump indicated that the war with Iran could end soon, underscoring the administration’s worries that a prolonged period of elevated energy prices would be harmful to the economy.

Oil and gas prices declined further after G7 leaders asked the IEA to assess potential stockpile releases from strategic reserves in an effort to cool markets. In response to the retreat in energy prices, rate traders moved to price in an additional Federal Reserve rate cut for this year.

Emerging signs of disinflation are likely to encourage FOMC members to put greater emphasis on supporting the labor market, especially after the latest jobs report came in weaker than expected. Nearly 100,000 net jobs were lost in February, and the unemployment rate rose unexpectedly.