(Bloomberg) — US government bonds, on the heels of their best month this year, rallied on economic data seen as cementing the case for three Federal Reserve interest-rate cuts this year.
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The 10-year Treasury yield fell below 4% for the first time since February on Thursday after a manufacturing gauge and jobless claims data added to evidence that the US labor market is cooling. The yield on two-year notes slid by as much as 11.5 basis points to 4.14%.
The market move precedes Friday’s release of broader US employment data for July, which will be closely watched by traders and policymakers alike.
Swaps traders priced in 85 basis points worth of easing by the Fed this year — anticipating a quarter-point reduction at each of its three remaining policy meetings. Fed Chair Jerome Powell, discussing in a news conference Wednesday the decision to hold rates steady as expected, said a rate cut “could be on the…
