US 10-year yield eases to 5.26% as October Fed hike odds fall

The US 10-year Treasury yield eased to 5.26% on 5 Oct, down 0.03 points. The 2-year was 4.82% and the 30-year 5.61%. Schwab, citing CME FedWatch, put the October hike probability at 14%, down from 70% early last week, while another source said roughly 23%.

Treasury yields are the benchmark borrowing cost for the whole financial system. Lower yields and lower hike odds ease pressure on stocks and gold. August PCE rose less than economists expected, though consumer spending stayed strong.

Bloomberg described the weak jobs report as a brief reprieve, with the open question being what happens if borrowing costs refuse to fall. Watch whether the 10-year stays above 5% and whether the ISM Prices Paid surge to 77.9 feeds into inflation. Sources differ on hike odds, so the trend matters more than any single number.