Fed Hike Odds Plummet as Long-End Treasuries Remain Vulnerable

The recent drop in Federal Reserve rate hike expectations has led to calmer front-end US dollar rates, but long-end Treasuries remain vulnerable to higher real yields and fiscal supply pressure.

According to Senior Rates Strategist Benjamin Schroeder, markets have scaled back Fed rate hike expectations, with September hike odds now at just over 30% rather than a previous 50%.

The long end of the Treasury market is particularly susceptible to these changes, as it remains tied to higher real yields and fiscal supply pressure.