Traders Bet on No More Fed Hikes, US Two-Year Yields Plunge

Treasury bonds surged, pushing key two-year yields to their lowest level this year, as investors bet the collapse of three US lenders will compel policymakers to halt interest-rate increases.

Swaps now show a less than one-in-two chance that the Federal Reserve will implement another quarter-point hike this cycle. Yields on two-year Treasury notes — the most sensitive to changes in policy — fell as much as 60 basis points to less than 3.99%, the lowest since October.