U.S. 2-year Treasury yields surged to 4.235% as traders reduce bets on aggressive Federal Reserve rate cuts in 2025.
The U.S. 2-year Treasury yield rose to 4.235% on Monday, approaching its highest level since February. The move reflects growing investor skepticism about the Federal Reserve delivering significant rate cuts this year.
Yields on the 2-year note, highly sensitive to Fed policy expectations, have climbed steadily as economic data remains resilient. Earlier this year, markets priced in multiple cuts, but recent inflation readings and labor market strength have tempered those expectations.
The shift in rate-cut bets has weighed on shorter-dated Treasuries, with the 2-year yield now trading near levels last seen in early 2025.