According to BlockBeats, U.S. Treasury yields experienced their first weekly decline since mid-August after Federal Reserve Chairman Jerome Powell dampened expectations for more aggressive rate cuts. On Friday, yields across various maturities increased by 1 to 3 basis points, continuing the upward trend initiated after the Fed announced a 25 basis point rate cut on Wednesday. The benchmark 10-year Treasury yield rose slightly to 4.12%, marking its highest level in two weeks.
During a press conference following the policy decision, Powell stated that policymakers would determine future monetary policy on a "meeting-by-meeting" basis. This stance tempered market expectations for rapid rate cuts, although the interest rate swap market still anticipates two more rate cuts by the Fed this year.
Amar Reganti, a fixed income strategist at Hartford Funds, noted that the bond market was extremely optimistic in both sentiment and positioning before the Fed meeting. While the Fed did implement a rate cut and may do so again in the future, this did not align with the market's current expectations. Previously, despite inflation rates remaining above the Fed's target, signs of weakness in the labor market led the market to bet on policymakers quickly lowering borrowing costs, driving up U.S. Treasury prices. However, the post-meeting sell-off ended this upward trend.