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Fed's divergence deepens uncertainty over rate cuts, U.S. Treasury prices fall and yields climb
2025-09-24 22:38

According to Odaily Planet Daily, U.S. Treasury prices fell as traders digested the divergent signals sent by Federal Reserve officials this week, which have clouded the path of interest rate cuts. Yields across all maturities rose by about 3 basis points, with the two-year yield, closely tied to Fed policy expectations, rising to 3.60% in New York on Wednesday. The yield on the five-year note, which previously rose by about 0.3 basis points from its pre-sale level at an auction, remained stable after the auction. Federal Reserve Chairman Jerome Powell said on Tuesday that the central bank must address both labor market weakness and upward inflation risks as it weighs future policy. On Wednesday, Treasury Secretary Benson expressed disappointment, saying Powell had yet to clearly lay out an agenda for rate cuts. "It's a bit of a tug-of-war, with disagreements within the committee," said Gregory Faranello, head of U.S. interest rate trading and strategy at AmeriVet Securities. Corporate bond issuance, including one from Oracle, also weighed on Treasury bonds. The software maker plans to raise $18 billion in the U.S. investment-grade bond market on Wednesday, its second-largest bond issuance this year.