The yield on the 10-year US Treasury note fell to around 4.16% on Wednesday, pulling back after testing the September highs in the previous session, as investors continued to bet on further Federal Reserve easing next year. Market pricing reflects expectations for up to two additional rate cuts in 2026. This comes despite initial Q3 GDP data showing the US economy grew at a 4.3% annualized rate, well above the 3.3% forecast and marking the fastest expansion in two years. The strong reading counters worries that tighter financial conditions had slowed the labor market, supporting arguments from Fed officials advocating a more hawkish stance. Policymakers’ median projection still points to one rate reduction in 2026. Bond trading will close early today and remain shut on Thursday for the Christmas holiday.
