US 2-Year Bonds Yield

U.S. 2-year yields fell to their lowest since 2022 as weak jobs data reinforced bets on Fed rate cuts. Friday’s report showed just 22,000 jobs added in August and unemployment rising to 4.3%, with downward revisions revealing June payrolls turned negative for the first time since late 2020. Investors are now fully pricing in a quarter-point cut at the Sept. 16–17 meeting and leaning toward three cuts this year, while some see scope for a larger half-point move. Still, upcoming inflation data could temper expectations, especially with tariffs threatening renewed price pressures.

• We are targeting a move by the US 2s towards 3% through 2025/2026 as the US economy softens.