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Tsy Curves Steepen on Fed Projections

US TSYS
  • Treasury futures look to finish the session mostly higher/off highs after the Fed held rates steady while projecting three rate cuts by the end of 2024. After the bell, TYM4 trades 110-12.5 (+8) vs. 110-22 high - just off technical resistance at 110-24 (20-day EMA).
  • Treasury futures had reversed course and extended session lows in 10s-30s briefly after Chairman Powell discussed the FOMC decision and policy projections. Jun'24 10Y tapped 110-01.5 (-3) low while curves held steeps (2s10s marked -33.119 high).
  • Tsys rebounded (as did stocks) as Chairman Powell said the Fed had "discussed issues related to slowing the pace of decline in our securities holdings. While we did not make any decisions today on this, the general sense of the committee is that it will be appropriate to slow the pace of run-off fairly soon."
  • Look ahead: focus turns to Thursday's Wkly Claims, S&P Global US PMIs, Home Sales. Fed VC Barr fireside chat "View from the Fed", Q&A at 1200ET.

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