The yield on the 10-year US Treasury note hovered around 4.2% on Wednesday, near a three-month low, as investors increased bets on a more dovish Federal Reserve policy stance. Recent ISM data showed US services activity nearly stalled in July, sharply missing expectations and highlighting the growing economic drag from President Donald Trump’s tariffs. In addition, Trump said he would name a nominee to fill a vacancy on the Fed’s Board of Governors by week’s end and is narrowing down candidates to potentially replace Chair Jerome Powell. Traders are now pricing in over a 90% chance of a Fed rate cut in September, with roughly 60 basis points of easing expected by year-end. On the trade front, Trump also threatened tariffs of up to 250% on pharmaceutical imports, along with possible levies on semiconductors.