US yields fall on AI growth fears and bets Fed will pause rate hikes

Key facts

• Longer-dated U.S. Treasury yields hit lowest levels since September 23.
• Concerns over slowing AI growth contributed to demand for Treasuries.
• Traders see a 73% chance the Fed will hold rates steady in October.
• The 10-year Treasury yield fell 10.1 basis points to 5.089%.
• The 30-year Treasury yield fell 9.8 basis points to 5.426%.

Longer-dated U.S. Treasury yields fell to their lowest levels since September on Thursday, driven by concerns about slowing AI growth and expectations that the Federal Reserve will hold interest rates steady at its upcoming meeting. Despite stronger-than-expected retail sales and producer price data, yields resumed their decline as analysts noted underlying softness in the reports and signals from Fed officials suggesting no immediate rush to raise rates. The jump in demand for Treasuries coincided with declines in technology stocks as investors sought safety. Traders are pricing in a roughly 73% probability of the Fed holding rates steady in October, with a nearly 91% chance of a hike in December.