U.S. Treasury bonds fall for the second consecutive day as traders' expectations for a Federal Reserve rate cut cool significantly

格隆汇3月3日｜U.S. Treasury bonds fell for the second consecutive day, as traders sharply reduced their bets on the extent of Federal Reserve rate cuts this year. Short-term bonds led the decline, with the 2-year Treasury yield rising by 12 basis points to 3.59%. Currently, the market's probability expectation for the Fed to implement a second 25 basis point rate cut within the year has dropped to about 50%; just last Friday, traders were still pricing in two rate cuts this year. This trend is part of a global bond market sell-off. Investors are concerned that a war between the U.S. and Israel against Iran could reignite inflation, prompting an accelerated sell-off of bonds. Some investors who previously bet that interest rates would remain stable for an extended period (or that the Fed would continue cutting rates) are now urgently reassessing their outlook.