Bond Market Update

FOMC Reaction Subdued

• U.S. Treasuries have backtracked from their highs with the 2-yr note turning negative while the 10-yr note is back near its opening level. The just released July FOMC Statement acknowledged that job gains have moderated, and the unemployment rate has moved up, but remains relatively low. The Statement noted that the outlook is uncertain and the Committee will be attentive to both sides of its [employment and inflation] mandate. The Statement did not contain overt signals about a September rate cut, but Fed Chairman Powell will likely be asked about that scenario at the upcoming press conference at 14:30 ET.
• Yield Check:
  • 2-yr: +2 bps to 4.38%
  • 3-yr: +1 bp to 4.18%
  • 5-yr: -1 bp to 4.03%
  • 10-yr: -2 bps to 4.12%
  • 30-yr: -3 bps to 4.37%