20.02.202602:23:01UTC+00US 10-Year Yield Slips on Geopolitical Risks

The yield on the US 10-year Treasury note eased to around 4.07% on Friday, retracing part of its earlier advance as rising tensions between the US and Iran spurred safe-haven demand for government bonds. The US military has increased its presence in the Middle East as President Donald Trump weighs potential measures aimed at pressuring Tehran in future negotiations.

On the data front, Thursday’s releases showed weekly jobless claims falling to a five-week low, even as the US trade deficit widened in December and pending home sales declined in January. Investors are now looking ahead to advance fourth-quarter GDP figures and the latest reading of the PCE price index, the Federal Reserve’s preferred inflation gauge.

Minutes from the most recent FOMC meeting revealed a split among policymakers over the interest rate path, with some members signaling that further hikes may be warranted if inflation remains stubbornly high. While traders have dialed back expectations for aggressive monetary easing, markets still anticipate two 25-basis-point cuts before year-end.