Treasury Yields Pause Amid French Fiscal Fears and Weaker Fed Hike Expectations

US Treasury yields have paused their rapid rise due to concerns over France's fiscal deterioration and weaker expectations for additional Federal Reserve rate hikes.

The yield on the two-year US Treasury note, which had risen as high as 4.93% intraday the previous day, traded at 4.78% as of 4 p.m. on October 2.

The government's plan to reduce government bond supply is also contributing to the decline in yields, with the Ministry of Economy and Finance cutting planned October government bond issuance by 5 trillion won ($3.62 billion) from its original plan using excess tax revenue.

This move has raised expectations for yield stability, with investors expecting easing supply pressure to help stabilize yields.