US Treasuries Resume Rally on Bets More Rate Cuts Are Coming

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Federal Reserve officials lowered their benchmark interest rate by a quarter percentage point and penciled in two more reductions this year following months of intense pressure from the White House to slash borrowing costs.(Bloomberg) -- Treasuries headed for their biggest advance in more than a week as traders bet on a period of monetary loosening after the Federal Reserve’s interest-rate cut.The yield on US 10-year debt dropped four basis points to 4.05%, while its more rate-sensitive two-year peer fell to 3.52%.Most Read from BloombergManhattan Casino Odds Fade After Caesars, Silverstein FoiledIn Dallas, Transit Cuts Reflect Long-Simmering Suburban TensionsThe Steep Curve to Peak UrbanNew York Executives Blast State Over Regulatory ‘Black Hole’When a College Dies, Who Gets the Campus?Treasuries had initially fluctuated after Wednesday’s 25 basis-point reduction: after climbing in the wake of the decision, they went into retreat as Fed Chair Jerome Powell signaled he wouldn’t abandon his cautious approach.Now, those concerns appear to be abating as investors bet on deeper easing ahead, with bonds once more on the rise.“More cuts are coming, we expect more by the end of the year, we think inflation will ultimately prove temporary,” Nicola Mai, sovereign credit analyst at Pacific Investment Management Co. said in an interview with Bloomberg TV. “We like bonds here.”Swaps imply around an 80% chance that the Fed will cut by another quarter-point next month and then again in December. In total, 120 basis points of easing is priced by the end of 2026, significantly more than the three cuts indicated by the Fed’s latest dot plot.While policymakers slightly upgraded their growth and inflation forecasts for 2026, the move is an acknowledgment that downside risks to the economy are growing.Attention is turning to initial jobless claims numbers, due at 8:30 a.m. New York time, which are expected to show a decrease to 240,000 from last week’s near four-year high, according to a Bloomberg survey of economists.WATCH: Pimco’s Nicola Mai discusses yesterday’s cut by the Fed and the outlook for further reductions.Source: BloombergStill, Jean Boivin, Head of the BlackRock Investment Institute, said the rate reductions might not be as aggressive as some are hoping.“We think it is notable that only one voting member of the FOMC favored a larger 50-basis point cut and that previous dissenters voted for the majority,” he said.  --With assistance from Alice Gledhill.(Updates with investor comment.)Most Read from Bloomberg BusinessweekThe Corporate Saga Behind Jeep’s DownfallWhy the Queen of Toddler TV Became an Activist for GazaMBAs Cost More and Are Less Profitable as ROI FallsMIT Sloan’s New Dean Is Ready to Tackle Threats to Higher EdCrypto Bros Are Trying to Monetize Charlie Kirk’s Death©2025 Bloomberg L.P.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,664.36 +32.40 (+0.49%)Dow 3046,315.27 +172.85 (+0.37%)Nasdaq22,631.48 +160.75 (+0.72%)Russell 20002,448.77 -18.93 (-0.77%)VIX15.45 -0.25 (-1.59%)Gold3,719.20 +40.90 (+1.11%)PortfolioSign in to access your portfolioSign inTop gainersOKLO Oklo Inc. 135.23 +30.26 (+28.83%)BHF Brighthouse Financial, Inc. 57.59 +12.33 (+27.24%)QUBT Quantum Computing Inc. 23.27 +4.92 (+26.81%)MENS Jyong Biotech Ltd. 65.62 +13.87 (+26.80%)SMR NuScale Power Corporation 46.77 +8.65 (+22.69%)Top losersDXCM DexCom, Inc. 67.45 -8.33 (-10.99%)HESM Hess Midstream LP 35.36 -4.12 (-10.44%)VOR Vor Biopharma Inc. 27.24 -3.16 (-10.39%)CART Maplebear Inc. 41.50 -3.90 (-8.59%)ORLA Orla Mining Ltd. 10.22 -0.85 (-7.68%)Most activeOPEN Opendoor Technologies Inc. 9.57 -0.37 (-3.72%)INTC Intel Corporation 29.58 -0.99 (-3.24%)SNAP Snap Inc. 8.16 -0.28 (-3.32%)NVDA NVIDIA Corporation 176.67 +0.43 (+0.24%)BBAI BigBear.ai Holdings, Inc. 6.85 +0.57 (+9.08%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersAAPL Apple Inc. 245.50 +7.62 (+3.20%)GOOG Alphabet Inc. 255.24 +2.91 (+1.15%)OKLO Oklo Inc. 135.23 +30.26 (+28.83%)QUBT Quantum Computing Inc. 23.27 +4.92 (+26.81%)AGMH AGM Group Holdings Inc. 10.34 +8.11 (+363.68%)Top economic events