American treasury delivers slides while Markt consumes Powell’s comments

US Treasury proceeds fell on Tuesday after comments from the Federal Reserve chairman Jerome Powell who points to caution around the next interest rate decision of the US Central Bank.

The Benchmark US 10-year-old Treasury Note yield reached the highest since 5 September on Monday and was the last down 2.6 basic points at 4.119%.

The 30-year bond return, which was won on Monday before his fourth consecutive session, was the last of the end of 2.5 BPS on Monday for 4.736%. The proceeds fell after Powell had cited the danger of reducing the rates in a speech and risked a new increase in inflation, or reducing the rates too slowly and possibly allows unnecessary and possibly permitted. Governor Bowman and Atlanta Fed President Raphael Bostic had similar feelings in their own comments on Tuesday. The proceeds rose last week despite the speed rate of the FED 25-base point and the signal for more relaxation at future meetings. They seem to have reached a quiet period this week, because the market is waiting for further data for indications of the direction of the economy and the chances of a new rate reduction or a tariff break during the October meeting of the FED.

“Many people are in waiting mode,” says Dominique Toublan, head of the American credit strategy at Barclays. “You still have strangers, you still have risks.”

Markets are pricing in a 92% chance of a reduction of 25 BP during the October meeting of the FED and 8% chances for a break. US rate futures have also been priced in 44 bps of cuts until the end of the year, according to LSEG data.

The return of two years, which usually reflects the expectations of the interest rate, was the last decrease of 0.9 BPS from Monday to 3.592%. It reached a highlight of three weeks of 3.6% in the afternoon trade on Monday. “Our basicase is still a reduction in October and December … but I don’t think it will be a foregone conclusion,” says Gennadiy Goldberg, head of the American strategy at TD Securities. A closely monitoring part of the US Treasury yield curve that measuring the gap between two and 10-year-old Treasury notes, seen as an indicator of economic expectations, was the latter at 52.4 BPS. Newly appointed Fed Gouverneur Stephen Miran, the only dissident during last week’s meeting in favor of the cutbacks on De Steiler, repeated his feelings on Monday. Three fed presidents, on the other hand, have offered all caution around the rate reductions in their own comments on Monday.

“Until now, the Hawks have been to Parade. … There are still concerns about inflation and possibly central bank dependence,” Gennadiy added. Economic data was scarce on Tuesday, but S&P Global’s Flash US Purchasing managers’ index releases for September, which pointed to a delaying picture for services and production.

On Tuesday, the Ministry of Finance auctioned $ 69 billion in two-year banknotes with a bid-to-cover ratio of 2.51x. It auctions another $ 70 billion in banknotes and $ 44 billion in banknotes later in the week.