Treasury Yields Hold Steady as Fed Readies Rate Decision

​Calm Before the Storm
Treasury yields started the week mostly flat as traders braced for what’s expected to be a Fed rate cut. The 10-year yield hovered at 4.06%, barely moving after last week’s choppy swings.

Waiting on the Fed
The Federal Reserve kicks off its two-day policy meeting Tuesday, with a decision due September 17. Markets are betting on a quarter-point cut, with more possible later this year.

Market Bets Build
Futures tied to Fed policy show traders are also leaning toward additional cuts in October and December. Wall Street is already sketching out a full easing cycle.

Inflation Still Stubborn
Fresh data last week showed consumer prices up 2.9% year-on-year in August, the sharpest monthly jump since January. Core inflation climbed to 3.1%, keeping pressure on the Fed.

Job Market Weakens
At the same time, jobless claims surged to their highest since October 2021, a sign that the labor market is losing steam. That mix — rising prices and soft jobs — puts Powell & Co. in a tricky spot.

Data Watch This Week
Before the Fed decision, investors will comb through import/export prices and retail sales on September 16, adding more pieces to the puzzle on how the economy is really holding up.

The Bottom Line
​Yields may be muted now, but with inflation proving sticky and jobs weakening, this week’s Fed decision could set the tone for markets heading into year-end.