U.S. Treasury Yields Decline Amid Sustained Market Expectations for Fed Rate Cuts

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Yields on U.S. Treasuries across various maturities fell during Asian trading hours, as data released last Friday indicated a slowdown in January inflation, reinforcing market expectations that the Federal Reserve will implement interest rate reductions this year. According to data from the London Stock Exchange Group, money markets are currently pricing in approximately 65 basis points of rate cuts by the Fed this year. The first rate cut is fully anticipated to occur in July, though the possibility of a reduction in June remains. Beyond the data-driven factors, analysts at Danske Bank noted that investor concerns regarding the Federal Reserve's independence have eased following the nomination of Kevin Warsh as the next Fed Chair, alongside a reduction in uncertainties related to trade tensions. Data from Tradeweb showed that the yield on the 10-year U.S. Treasury note dropped by 3.1 basis points to 4.024%.

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