Bond Market Update

FOMC Ahead

• U.S. Treasuries trade at their best levels of the session ahead of the expected rate cut atop the hour. There is essentially no doubt that a rate cut will be announced in short order, but Fed Chairman Powell's press conference will be watched closely to estimate the likelihood of another rate cut in December. The fed funds futures market currently sees a 66.3% implied likelihood of another 25-bps cut in six weeks and it sees a 31.2% implied likelihood of another decrease of same size in January.
• Yield Check:
  • 2-yr: -6 bps to 4.21%
  • 3-yr: -6 bps to 4.17%
  • 5-yr: -8 bps to 4.19%
  • 10-yr: -8 bps to 4.35%
  • 30-yr: -5 bps to 4.56%