U.S. government bond yields are moving up in early European trading, especially on longer-term bonds, as investors wait for the Federal Reserve’s interest rate decision coming on Wednesday.
Recent job data from the U.S. shows the labor market is still strong. Because of this, the Fed may not cut interest rates soon. According to economist Tiffany Wilding from Pimco, rate cuts are unlikely until there are clear signs that the job market is slowing down or shrinking.
Goldman Sachs predicts the Federal Reserve will cut interest rates three times—by 25 basis points each—in July, September, and October. The reason: growing recession risks linked to tariffs and trade tensions. Despite inflation staying high, Chief Economist Jan Hatzius believes increasing unemployment may push the Fed to take action.
Here are the current bond yield updates (based on LSEG data):
The 2-year Treasury yield is up by 0.1% (1 basis point), now at 3.845%
The 10-year Treasury yield is up by 0.02% (2 basis points), now at 4.368%
The 30-year Treasury yield is up by 0.03% (3 basis points), now at 4.862%
This rise in yields shows that investors expect the Fed to stay cautious and keep interest rates steady until the economy shows more signs of slowing down.
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