10.11.202503:07:46UTC+00US 10-Year Yield Rises as Govt Shutdown Nears End

On Monday, the 10-year Treasury yield increased by 3 basis points, reaching approximately 4.13%, following indications that a resolution to the protracted government shutdown could be on the horizon. Senate Majority Leader John Thune indicated on Sunday that progress is being made toward a federal budget agreement. This development could potentially lead to the reopening of the government through January and reverse some of the recent federal layoffs. Furthermore, there are reports that some Democrats might support the proposed package even if it does not include an extension of health care subsidies, though significant uncertainty persists. Recent weak U.S. economic data have contributed to market unease, highlighted by the University of Michigan’s consumer sentiment index dropping to its lowest point in almost three and a half years, and the Challenger report revealing a notable increase in job cuts for October. When it comes to monetary policy, opinions remain divided on the likelihood of a Federal Reserve rate cut in December. Traders currently see a 67% probability of a quarter-point rate reduction, the same as was recorded on Friday.