Treasury Yields Retreat This Week as Fed Halts Interest Rate Hikes

U.S. Treasury yields cooled this week with the 10-year Treasury at about 4.6% on Friday. The 10-year had raced past 5% in recent weeks.

The 2-year Treasury was at almost 5% as of Friday before October’s job report. Banks as well as equity investors are hoping for signs that the labor market is easing.

While the Fed did not raise interest rates for the second straight time, Powell did hint this week that it may raise rates again if the economy stays strong and the labor market does not show signs of easing. Unemployment is expected to stay around 3.8% and payrolls have continued to increase.

The market is expecting that the Fed will be done with further rate hikes, but a number of key analysts have stated that they do not expect rate cuts until deep into 2024 at the earliest.

The equity markets rallied this week for the first time in weeks on positive earnings and the Fed’s decision to keep rates steady.

High interest rates and low inventory have continued to limit real estate transactions.