US Treasury yields hit two-month highs on Tuesday, with the 10-year and 30-year notes both climbing. The move comes as market odds of a Federal Reserve rate pause over the next three meetings rose to 55.5%.
Two-month highs
The 10-year Treasury yield touched its highest level in two months. The 30-year bond followed suit. Higher yields typically mean investors expect the central bank to keep borrowing costs elevated for longer. That reprices bonds and can weigh on stocks.
Pause probability
Market pricing now shows a 55.5% chance the Fed will hold rates steady across its next three policy decisions. That leaves a 44.5% probability of at least one cut. The numbers suggest traders are split but leaning toward no action.
The shift in expectations comes as economic data continues to come in. Investors are watching for any sign that inflation is sticky enough to keep the Fed on hold.
The next Fed decision is the key event on the calendar. Until then, the bond market is sending a clear signal: don't expect a quick pivot.
