U.S. Treasury bonds rose as the latest batch of economic data showed a slowdown in economic activity and cooling inflation, supporting expectations that the Federal Reserve will cut interest rates twice this year. The bond rally on Thursday pushed yields on two-year to ten-year Treasury bonds down by 10 basis points or more.
After several large transactions, yields on longer-term Treasury bonds also retreated from near 5% levels. Swap contract traders expect a rate cut of about 55 basis points for the remainder of 2025. The dollar fell.
Earlier this week, Wall Street strategists, including JP Morgan, raised their yield forecasts as these firms delayed expectations for when the Federal Reserve would resume easing policies.
Zachary Griffiths, head of investment-grade and macroeconomic strategy at CreditSights Inc., stated, “Bad news is good news for the bond market,” as Thursday’s data—including producer prices and retail…
