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Positive US Data Suppresses Expectations of Interest Rate Cuts
Summary: According to reports from FXStreet, US short-term Treasury bond prices fell slightly as strong US economic growth and employment data weakened market expectations of two interest rate cuts by the Federal Reserve before the end of the year. The US second-quarter economic growth rate was revised from 3% to 3.3%, exceeding economists' expectations. Following the ...
According to reports from FXStreet, US short-term Treasury bond prices fell slightly as strong US economic growth and employment data weakened market expectations of two interest rate cuts by the Federal Reserve before the end of the year. The US second-quarter economic growth rate was revised from 3% to 3.3%, exceeding economists' expectations. Following the data release, the yields on two to five-year US bonds rose by at least two basis points, reaching a daily high. Meanwhile, initial jobless claims fell more than expected, signaling a strong labor market. Sudra Raja, US interest rate strategist at Societe Generale, stated that the data continues to show that despite tariff uncertainties, consumers remain resilient. Raja noted that the front end of the US bond yield curve is feeling the tug of whether the Fed should cut rates in September. She added that although Fed Chairman Powell leans towards a more dovish stance, the data continues to suppress the need for rate cuts.
