The CME FedWatch Tool showed an 85% chance of unchanged U.S. interest rates next week as the 10-year Treasury yield stayed above 5% Tuesday despite weak housing data.
CNBC put the 10-year yield at 5.092%, down more than four basis points. It reported a 30-year yield of 5.415%, down more than five basis points, and a two-year yield of 4.751%, down one basis point. A basis point is 0.01 percentage point. Existing bond prices generally rise when their yields fall.
The yield declines followed a disappointing reading on home construction. CNBC reported 1.22 million housing starts in September, 5.2% below the revised August figure. Economists surveyed by Dow Jones had forecast 1.3 million.
Chris Rupkey, chief economist at FWDBONDS, said surveys pointed to deep pessimism among homebuilders. He linked labor shortages to Washington’s immigration policies and said geopolitical risks were raising inflation and the cost of building materials.
The FedWatch probability of unchanged rates was up from 42.4% a month earlier. The shift came as investors weighed softer housing activity against inflation concerns ahead of the Federal Reserve’s next decision.
An earlier EconoTimes report documented a 22-basis-point decline in the 10-year yield to 5.09%. That report used the Treasury’s daily par-yield series, based on indicative market bids collected around 3:30 p.m. ET.
Oil futures also declined Tuesday. CNBC reported West Texas Intermediate crude down more than 1% near $102 a barrel and Brent down more than 2% around $106. The outlet linked earlier crude gains following the start of the Middle East conflict this year to heightened inflation concerns.
CNBC said investors were awaiting Thursday’s weekly initial jobless claims report. Next week brings the Fed’s rate decision and the personal consumption expenditures (PCE) index, its preferred measure of inflation.
