Treasury Yields Fall After Soft Retail Sales

2026-02-10 13:55 By Joana Taborda 1 min. read

The yield on the US 10-year Treasury fell nearly 6bps to 4.15% on Tuesday, its lowest level since mid-January, after a weaker-than-expected retail sales report signalled a sharp slowdown in consumer spending, reinforcing expectations that the Fed will lower interest rates this year.

Retail sales unexpectedly stalled in December, missing forecasts for a 0.4% increase, while the core control group that feeds into GDP calculations fell 0.1%.

Money markets are now assigning around a 25% probability that the Fed will deliver three quarter-point rate cuts in 2026, up from expectations of just two cuts a week earlier.

Looking ahead, investors will focus on the benchmark employment report due tomorrow and the CPI release on Friday for further insight into the trajectory of the US economy.

Meanwhile, investors are also monitoring developments in China after reports that authorities have encouraged banks to reduce exposure to US Treasuries amid concerns over concentration risk and volatility.



News Stream
Treasury Yields Fall After Soft Retail Sales
The yield on the US 10-year Treasury fell nearly 6bps to 4.15% on Tuesday, its lowest level since mid-January, after a weaker-than-expected retail sales report signalled a sharp slowdown in consumer spending, reinforcing expectations that the Fed will lower interest rates this year. Retail sales unexpectedly stalled in December, missing forecasts for a 0.4% increase, while the core control group that feeds into GDP calculations fell 0.1%. Money markets are now assigning around a 25% probability that the Fed will deliver three quarter-point rate cuts in 2026, up from expectations of just two cuts a week earlier. Looking ahead, investors will focus on the benchmark employment report due tomorrow and the CPI release on Friday for further insight into the trajectory of the US economy. Meanwhile, investors are also monitoring developments in China after reports that authorities have encouraged banks to reduce exposure to US Treasuries amid concerns over concentration risk and volatility.
2026-02-10
US 10-Year Yield Edges Down
The yield on the US 10-year Treasury note dipped below 4.2% on Tuesday, falling for a second consecutive session as investors awaited key US economic data this week that could shape expectations for Federal Reserve policy. Reports due include the delayed employment and inflation data, along with retail sales figures. White House economic adviser Kevin Hassett noted on Monday that US job gains could slow in coming months due to weaker labor force growth and higher productivity. The Fed is widely expected to keep interest rates steady in March, with two rate cuts priced in later this year. Treasury yields also eased despite reports that Chinese regulators had advised financial institutions to limit their US Treasury holdings to reduce concentration risks and mitigate the impact of uncertain US economic policies.
2026-02-10
Treasury Yields Move Lower
The yield on the US 10-year Treasury note edged down to 4.21% on Monday, reversing earlier gains as investor sentiment improved ahead of a heavy slate of economic data due this week. The releases are expected to help assess the health of the US economy and refine expectations for the Fed’s policy outlook. Key data include the delayed employment report, alongside CPI and retail sales. Markets currently expect the Fed to leave interest rates unchanged in March, with the first rate cut potentially arriving in June and another possible move in September. Adding to the more constructive tone, inflation expectations for the year ahead fell to their lowest level in six months in January, while consumers also became less concerned about employment prospects. Earlier in the session, Treasury yields had moved higher following reports that Chinese regulators urged domestic banks to curb their holdings of US Treasuries, citing concerns over concentration risks and market volatility.
2026-02-09