US Yield Curve Steepens as Bond Traders See Fed Cuts Looming
- Dudley said Fed should cut interest rates as soon as next week
- US auctioned $70 billion of five-year notes on Wednesday
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The US yield curve steepened sharply amid growing calls for the Federal Reserve to start cutting interest rates as soon as next week.
Yields on policy-sensitive two-year Treasuries slid three basis points on Wednesday, while those on 10-year bonds were up by about the same amount. That pushed the differential between those yields to about 14 basis points, the smallest margin since October 2023.