Overview

• The 10-year yield hovered near 4.133%, the 2-year held around 3.599%, and the 30-year dipped to about 4.75% in early Tuesday trading.
• Investors are focused on the Federal Reserve’s preferred inflation gauge, the PCE index, due Friday for fresh signals on price pressures and growth.
• The Fed cut rates by 25 basis points last week, and CME FedWatch shows traders pricing in roughly two additional quarter-point cuts this year.
• Deutsche Bank expects Powell’s tone to align with last week’s messaging and projects a softer-than-feared core PCE print based on recent data inputs.
• Eastspring Investments characterizes the Fed’s recent stance as a dovish shift, viewing the backdrop as supportive for interest rate markets in the coming months.