Fed Divisions Deepen Rate Cut Uncertainty as US Treasury Prices Fall and Yields Rise

Jinse Finance reported that U.S. Treasury prices fell as traders digested the divergent signals released by Federal Reserve officials this week, making the path for rate cuts more uncertain. Yields on Treasuries of various maturities generally rose by about 3 basis points, with the two-year Treasury yield, which is closely linked to Fed policy expectations, rising to 3.60% in the New York market on Wednesday. Previously, the yield on the five-year Treasury at auction was about 0.3 basis points higher than the pre-issuance level, and remained stable after the auction. On Tuesday, Fed Chair Powell stated that the central bank must balance the risks of a weakening labor market and rising inflation when considering future policy. On Wednesday, Treasury Secretary Bessent expressed disappointment, saying that Powell has yet to clearly set out a rate cut agenda. Gregory Faranello, Head of U.S. Rates Trading and Strategy at AmeriVet Securities, said: "It's a bit of a tug-of-war, with divisions within the committee." Corporate bond issuance is also putting pressure on Treasuries, including Oracle's bond offering. The software maker plans to raise $18 billion in the U.S. investment-grade bond market on Wednesday, marking the second-largest bond issuance of the year.