US Treasury yields moved lower across the curve on Thursday as traders reacted to comments from Federal Reserve Governor Christopher Waller, who indicated a preference for keeping interest rates unchanged at the central bank's next policy meeting in two weeks. The 10-year Treasury yield, a key benchmark for mortgages, auto loans, and credit card debt, slipped more than 3 basis points to 4.756%, while the 30-year yield, which is more sensitive to geopolitical developments, fell over 2 basis points to 5.241%. The 2-year yield, which closely tracks expectations for the Fed's short-term rate decisions, dropped more than 5 basis points to 4.328%. A basis point equals 0.01%, or one-hundredth of a percentage point. Yields and bond prices move in opposite directions.

Although Waller acknowledged that inflation remains significantly above the Fed's 2% target, he expressed confidence in the current trajectory of price pressures. Speaking to Reuters, Waller said the latest data "suggest that we are finally seeing some signs of disinflation." He added, "If the data due out over the next two weeks continues to show this trend, I will be inclined to support holding the federal funds rate target range unchanged." Treasury yields retreated in response to his remarks, reversing some of the sharp climb seen over the past month, which had been driven by growing concerns over debt levels, inflation, and rising global energy prices. On Wednesday, yields had touched multi-year highs.

Investors are now awaiting the next major labor market indicator—the August nonfarm payrolls report, due for release on Friday. Before that, the market has already digested the latest US ISM Services PMI, a monthly gauge of business conditions in the services sector, which came in at 55.4 for August, beating the 54.1 expected by economists polled by Dow Jones.

Meanwhile, geopolitical tensions in the Middle East are also adding to market risk. Iran recently launched missiles and drones toward Kuwait, though former President Trump suggested that the current escalation may not last "very long." October-delivery West Texas Intermediate (WTI) crude futures rose nearly 1%, breaking above $91 per barrel, while the international benchmark Brent crude was last up 0.5% at $96 per barrel.