Jerome Powell

The recent rally was driven by economic data that reinforced wagers on at least two rate cuts this year, as well as speculation President Donald Trump will name a more dovish successor to Jerome Powell.

Yields across maturities declined, with those on two-year notes falling five basis points and most reaching the lowest level in more than a month.

Some allies of the president have pushed for Treasury Secretary Scott Bessent to get the job, according to people familiar with the matter, a notion that a senior administration official disputed.

Bond investors are on alert for hints on when the Federal Reserve will deliver the two 2025 interest-rate cuts officials projected at their latest policy meeting.

Powell said as policymakers look for more clarity on tariff policies, the risks of higher inflation and unemployment have increased due to President Donald Trump's sweeping levies.

The declines on Thursday pushed two- to 10-year yields higher by at least 10 basis points on the day after President Donald Trump urged people to buy stocks based on the latest trade developments.

With the central bank expected to keep its benchmark rate steady at 4.25%-4.50% on Wednesday, traders will be scrutinizing comments by Fed Chair Jerome Powell.

The pace of hiring drove traders to dial back rate-cut bets that had steadily mounted as Trump's trade war unleashed havoc in financial markets and sowed fears of a US recession.

As President Donald Trump approaches his 100th day in office, he has generated a growing list of unknowns, forcing traders to focus on a broad array of issues beyond just the likely path of interest rates.

At the Oval, Trump didn't respond to a follow-up question from a reporter about whether he was trying to remove him.