Bond Market Update

FOMC Ahead

• Longer-dated Treasuries hover just below their best levels of the day while the 2-yr note lags in anticipation of the FOMC Statement at 14:00 ET. There is very little uncertainty associated with today's meeting, which is expected to set the stage for a rate cut in September. The market is pricing in a 100.0% likelihood of a rate cut at the next meeting, but Fed Chairman Powell's comments could influence expectations for the remainder of the year. The fed fund futures market expects two more cuts to follow after September, leaving the fed funds rate range at 4.50-4.75% at the end of this year.
• Yield Check:
  • 2-yr: UNCH at 4.36%
  • 3-yr: -1 bp to 4.16%
  • 5-yr: -3 bps to 4.01%
  • 10-yr: -4 bps to 4.10%
  • 30-yr: -6 bps to 4.35%