US Two-Year, Five-Year Yields Fall to Lowest Levels Since May

US short-dated bonds yields fell to their lowest levels in more than three months, reflecting conviction among traders that the Federal Reserve will cut interest rates in September.

The two-year yield, among the most sensitive to changes in monetary policy, fell about two basis points to 3.65%, the lowest level since May 1. It’s down about 30 basis points since July 31, before tumbling on weaker-than-expected July employment data released the next day. The five-year note’s yield also reached the lowest level since May 1.