US Treasury Yields Rise Amid Fed Rate Cut Uncertainty

U.S. Treasury yields, including the 10-year and 30-year notes, have risen recently amid cautious investor sentiment ahead of key economic data releases such as the PCE price index and GDP estimates, which are critical for gauging inflation and growth. Market participants are closely watching for signals on potential Federal Reserve interest rate cuts, with futures markets pricing in a high probability of a 25 basis point cut in September, though some strategists express skepticism given mixed economic data. Political tensions have increased market volatility following President Donald Trump's removal of Federal Reserve Governor Lisa Cook over alleged mortgage fraud, raising concerns about the Fed's independence and prompting speculation that this could accelerate rate cuts. The dollar has strengthened on higher Treasury yields and stock market weakness, while the euro weakened due to geopolitical uncertainties and dollar strength. Despite hints from Fed Chair Jerome Powell about possible rate cuts, the economic data in August may challenge these expectations, contributing to a choppy trading environment for U.S. rates. Overall, investors remain wary as they await critical data that will influence the Fed's policy trajectory and the broader financial markets.