Treasury yields rose again while U.S. equities struggled. The latest auction for the 10-year Treasury note saw its highest yield since 2007 at 4.68%, reaching a peak of 4.73%. Since the Fed began its rate-cutting cycle, yields have surged from about 3.7% to 4.7%, a reversal of the typical trend where rate cuts indicate approaching recessions. Currently, the Fed is reducing interest rates due to shifting inflation expectations, which have increased from 2.6% to 2.8% for 2024. Consequently, the market anticipates a 95% likelihood that rates will remain steady in the upcoming Fed meeting. Additionally, bond traders are reacting to upcoming changes in the administration, which has caused unusual market movements. The latest Fed minutes may provide further insights into these developments.

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