Treasury Yields Plow Higher as Traders See First Fed Cut Later
- Policy-sensitive two-year yields lead losses after sturdy data
- ‘The short end is fearful of the Fed’: Brenner at NatAlliance
The US Treasury building in Washington, DC.
Photographer: Samuel Corum/BloombergThis article is for subscribers only.
Treasury yields surged as data showing strength in US business activity and a tight labor market sparked traders to push back the timing for Federal Reserve interest-rate cuts until the end of this year.
The Fed-policy sensitive two-year yield rose more than 8 basis points to touch 4.955%, its highest since May 2, before easing a touch late in New York. Meanwhile, rates across maturities were up at least 5 basis points, causing the yield curve to flatten. Trading volume was below average heading into a long weekend, with US markets set to shut Monday for Memorial Day.