The “fair value” estimate for the 10-year US Treasury yield remained relatively steady in August while the average level of the actual benchmark rate in the market continued to ease. As a result, the market premium for the 10-year yield dipped to the lowest level in nearly a year last month, based on the average for three models run by CapitalSpectator.com. The downside bias in the market premium -– actual yield less the fair-value estimate — has accelerated lately, fueled by firmer expectations that the Federal Reserve will cut interest rates at its Sep. 17 policy meeting.
Daily Archives: September 12, 2025
Macro Briefing: 12 September 2025
US consumer inflation continued to rise in August at the headline level in year-over-year terms, rising to 2.9% — the highest since January. “Consumer inflation came in mildly hotter than forecast, but not nearly high enough to prevent the Fed from starting to cut rates next week,” said Kathy Bostjancic, chief economist for Nationwide. “The labor market is losing steam and reinforces that the Fed needs to start cutting rates next week and that it will be the start of a series of rate reductions.”
