Two-Year Treasury Yield Sinks to May Low on Fed Cut Expectations

The yield on the U.S. two-year Treasury note fell to about 3.67% on Thursday, its lowest level in more than three months and the weakest reading since May. The move extends a decline of roughly 30 basis points in recent sessions, underscoring a strong rally in short-dated government debt. Traders attribute the drop to growing confidence that the Federal Reserve will begin cutting interest rates at its policy meeting next month. The shift in rate expectations has pushed investors into shorter-maturity bonds, compressing yields even as longer-dated benchmarks have been comparatively steadier.