US 10-year bond yields decline due to dovish Powell's remarks

US 10-year bond yields fell to around 4.2% on Tuesday and returned to a four-month low in response to the central bank governor's dovish remarks.

US Federal Reserve (Fed) Chairman Powell said on Monday that recent data is “somewhat convincing” that inflation is returning to target and that the central bank will not wait until inflation reaches 2% to cut interest rates.

The market has almost factored in interest rate cuts in September, and it is expected that there will be two more rate cuts by the end of the year.

Investors are now paying attention to US retail sales data and central bank explanations to further determine where monetary policy is going.

Meanwhile, the fact that the possibility that President Trump will take office as the second president increased after the attempted assassination incident slightly underpinned government bond yields.

President Trump's policies are expected to cause inflation due to tax cuts, strengthened immigration control, and import tariff increases.