Latest News: Policy signals regarding the Federal Reserve Chair's succession are stirring the bond market. Influenced by expectations of leadership changes, U.S. Treasury prices continue to decline, and traders are significantly adjusting their interest rate cut forecasts for the year—optimism about two rate cuts in 2026 has noticeably warmed.

Specifically, the two-year U.S. Treasury yield briefly rose to 3.61%, hitting a high not seen since the Fed's last rate cut in December last year. What does this number mean? Short-term financing costs are rising, and market expectations for future interest rate movements are being recalibrated.

From the perspective of interest rate derivatives, the probability of the Fed implementing two 25 basis point rate cuts this year has already decreased significantly. In other words, the market is digesting a more hawkish policy outlook—the path to rate cuts may not be as wide open as previously thought. This is a clear shift signal for bond investors and traders.