🚨🇺🇸 THE U.S. BOND MARKET REVERSES EXPECTATIONS ON RATES IN 25 DAYS 🇺🇸🚨
The U.S. bond market has just sent a powerful signal: in less than a month, expectations regarding the Federal Reserve's monetary policy have been completely reversed.
The protagonist of this change in scenario is the yield on the 2-year Treasury, considered the best “real-time” indicator of the Fed's future moves.
Between 2022 and 2023, while the Fed raised rates from zero to 5.25% with the most aggressive tightening in the last 40 years, the 2-year yield anticipated every single movement.
Subsequently, between 2024 and the beginning of 2026, with three cuts bringing the Fed Funds to 3.64%, the 2-year yield also fell, reflecting expectations of further reductions.
Then came March 2026. The 2-year yield once again exceeded 4%, surpassing the Fed's official rate. This is a crucial signal: when it happens, the market is no longer pricing in cuts, but possible hikes.
Just three weeks ago, two cuts were expected in 2026.
Today, there is talk of a possible rate increase.
A complete reversal.
From a technical standpoint, the breakout to the upside of the descending triangle strengthens the trend.
The next target is between 4.5% and 5%, especially if oil remains above $90.