The yields of the short -term bonder of USA They are close to their lower level in more than three months, reflecting investors’ belief that the US Federal Bank (FED) will reduce interest rates next month.
The yield on two -year US bonds, which is one of the most sensitive to monetary policy changes, ranged around 3.67% this morning (14.8.2025). It has fallen nearly 30 basis points since late July, with much of the movement following the lowest than expected payroll data.
Earnings have been supported by the expectations that Fed officials will reduce borrowing costs for the first time this year at the September meeting – a move that President Donald Trump has repeatedly requested.
A new series of financial data later today, including producer prices and initial applications for unemployment benefits, will provide further information on the health of the US economy.
The yield on 10 -year bonds has fallen to about 4.22%, 15 basis points lower than late July. Today was slightly lower.
The market climate has changed dramatically compared to two weeks ago, when expectations to reduce interest rates in September were below 50%. This began to change after the announcement of the disappointing evidence of employment, which intensified Trump’s campaign to force the Fed to reduce borrowing costs.
Finance Minister Scott Bessed reinforced this call yesterday Wednesday (13.8.2025), suggesting that a reduction of 50 base points in December would be appropriate. He added that interest rates “should probably be 150, 175 basis points lower”.
“One of the strategies that follow is to shift the window to what is acceptable,” said Henry Allen, Deutsche Bank AG’s macroeconomic strategy in an interview on Bloomberg TV. Contrary to the big moves that Bessed and Trump are demanding, “suddenly a 25 -base interest rate reduction seems quite moderate and feasible.”