The US Treasury yield curve is showing a twist that market participants interpret as a sign that the Federal Reserve may be less likely to raise interest rates in the near term. Short-term yields have declined while longer-term yields have risen. The Fed’s current policy rate stands in a range of 3.50% to 3.75%. Market data shows the probability of a pause sequence at upcoming meetings has decreased to 38% for the September 16 decision. Economic indicators including inflation and employment data remain key factors in the Fed’s policy direction.
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