TechFlow news, October 10 — According to Jinshi Data, U.S. Treasury prices rose Friday as traders reacted to signs that a government shutdown may be weakening economic activity. Yields across all maturities fell by at least two basis points, with long-dated bonds dropping more than four basis points. The yields on 10-year and 30-year Treasuries both hit their lowest levels of the week. The shutdown began on October 1 due to the White House and Congress failing to reach a funding agreement. An additional two million federal employees are expected to miss paychecks next week, adding to the 250,000 already unpaid this week, further expanding the impact. Tomdi Galoma, Managing Director at Mischler Financial Group, said: "The government shutdown is playing a key role in the market's expectations of a weakening economic outlook. The critical point is that this situation could persist for some time." Due to the closure, the release of official economic data has been delayed. However, economists from Citigroup and Goldman Sachs noted that state-level data indicate an increase in initial jobless claims last week. This strengthens market expectations that the Federal Reserve will deliver its second rate cut of the year on October 29. Federal Reserve Governor Waller said Friday that, given weakness in the labor market, he supports two more rate cuts this year. Other factors boosting U.S. Treasuries include strength in UK and French government bond markets, crude oil prices falling to multi-month lows, and favorable supply conditions.
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