Treasury Yields Plunge as Traders Bet on Fed Rate Hike Pause

Treasury yields plunged on Tuesday, with the 2-year rate ending at its lowest level in over a month as traders priced in a high chance of no more Fed rate hikes.

The yields on the 2-year, 10-year, and 30-year Treasuries all finished sharply lower following dovish comments from Fed officials.

Traders are pricing in an 89.6% chance of a Fed pause in November and a 70.5% chance of no hike in December after recent remarks.

The retreat in yields comes ahead of key inflation data this week that will test if traders' views have shifted on the Fed's priorities.

Analysts say upward momentum in yields has been mostly technical and should reverse, but uncertainty remains on factors like bond issuance and rate levels.