Powell pours cold water on "aggressive rate cuts" as US Treasury bonds end their consecutive rise.

[Powell pours cold water on "aggressive rate cuts" as US Treasuries end consecutive rise] After Fed Chairman Powell extinguished market expectations for "more aggressive rate cuts," US Treasuries experienced their first weekly decline since mid-August. On Friday, yields on US Treasuries across maturities rose by 1 to 3 basis points, continuing the upward momentum that began after the Fed announced a 25 basis point rate cut on Wednesday. The benchmark 10-year US Treasury yield slightly climbed to 4.12%, marking the highest level in two weeks. Powell stated at the post-policy decision press conference that policymakers would decide on future monetary policy in a "meeting-by-meeting" manner. This statement suppressed market expectations for "rapid rate cuts," although the interest rate swap market still tends to believe that the Fed will cut rates two more times this year. Amar Reganti, a fixed income strategist at Hartford Funds, noted, "Before this Fed meeting, sentiment and holdings in the bond market were extremely optimistic. The Fed did indeed implement a rate cut, and there may be a few more in the future, but this clearly does not align with current market expectations." Previously, despite inflation remaining above the Fed's target, signs of weakness in the labor market led the market to bet that policymakers would quickly lower borrowing costs, driving US Treasury prices higher; however, the post-meeting sell-off ended this rally.