The yield on the 10-year US Treasury note eased to 4.15% after testing four-month highs of 4.2% earlier this week as markets gauged the magnitude of rate cuts expected by the Federal Reserve this year. New data indicated that both headline and core producer prices refrained from rising above expectations in November, aligned with a cooler CPI print released earlier this week. The results maintained the market’s view that the Fed is due to deliver two or three interest rate cuts this year, with bets of disinflation making room for policymakers to prioritize a stagnating labor market. Meanwhile, President Trump ordered the Freddie Mac and the Fannie Mae to purchase $200 billion in mortgage backed securities, potentially adding demand to long-dated fixed-income securities. In turn, strong retail sales aggregates maintained the view of robust household expenditure in the US economy.
