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2025-10-30 19:04:29
[Interest Rate Cut Dream Shattered, Long-Term Bond Yields Soar] ⑴ The Federal Reserve hinted on Wednesday that a December rate cut is far from certain, while also announcing the end of balance sheet reduction starting in December, causing long-term bond yields to rise sharply. ⑵ Tradeweb data shows that the 10-year Treasury yield rose 2 basis points to 4.078%, the 30-year yield surged 3 basis points to 4.629%, and the 2-year yield followed suit with a 1.4 basis point increase to 3.600%. ⑶ The steepening yield curve indicates that traders are repricing a later and less easing path. The moderate rise at the short end reflects expectations of a policy pause, while the long end is compounded by a rebound in the term premium. ⑷ If subsequent data remains strong, it may only be a matter of time before the 30-year yield tests the psychological level of 4.70%, and volatility is expected to remain high.
