The yield on the 10-year US Treasury note traded around 4.78% on Thursday after pulling back from three-year highs, as investors continued to assess the outlook for Federal Reserve monetary policy.
New York Fed Bank President John Williams said there is evidence that inflation continues to ease as the impact of tariffs fades, while higher energy prices have yet to spread to other services.
Data on Wednesday also showed that US private employment growth slowed in August. Still, markets are pricing in around a two-thirds chance of a Fed rate hike later this month following Chair Kevin Warsh’s hawkish remarks on Friday.
Investors now look ahead to the latest weekly jobless claims data on Thursday ahead of Friday’s August payrolls report for fresh insight into the state of the US labor market.
Elsewhere, oil prices halted their rally after President Donald Trump said the latest attacks on Iran would be short-lived, easing inflation concerns.