Strong Market Expectations for Federal Reserve Rate Cuts: Record Demand for Two-Year US Treasuries
Publication Time:2024-07-24 05:16:07
Recently, the US Treasury successfully issued $69 billion in two-year government bonds, a record-breaking amount. The enthusiasm of investors was evident, as their demand for this bond surpassed previous levels, demonstrating the market's strong endorsement of expectations for a rate cut by the Federal Reserve. The bid yield was reported at 4.434%, significantly lower than the trading level before the issuance at 1 pm Eastern time, more than 2 basis points. This yield level was the lowest since January, when the issuance size was $60 billion. John Canavan, an analyst at Oxford Economics, stated that the market expects the Federal Reserve to lay the groundwork for its rate cut in September next week. This outlook not only maintained the robust demand for short-term US Treasuries within this month, but also extended it to today's auction.
Federal Reserve
market response
Rate Cut Expectations
US Treasury
Two-Year Government Bonds