The post Bulls’ Fed Rate Cut Optimism Challenged by Resilient Bond Yields appeared on BitcoinEthereumNews.com. As crypto bulls pin their hopes on Federal Reserve (Fed) rate cuts to drive a sustained decline in bond yields and the dollar, signals from the bond market tell a different story. The Fed is expected to cut rates by 25 basis points to the 3.5%-3.75% range on Dec. 10, continuing the so-called easing cycle that began in September last year. Several investment banks, including Goldman Sachs, expects rates to drop to 3% next year. An expected drop in interest rates typically weighs on Treasury bond yields and weakens the dollar index, both of which support increased risk-taking in financial markets and bodes well for digital asset such as bitcoin BTC$87.058,23, XRP$2,0191, solana SOL$127,20, DOGE$0.1358 and others. But that’s not happening of late. The yield on the 10-year Treasury note continues to hover above 4% in familiar ranges. Moreover, it is up 50 basis points since the Fed’s first rate cut in mid-September 2024. The U.S. 10-year yield is up 50 bps since the first Fed rate cut in September 2024. (TradingView) The stickiness in Treasury yields likely stems from ongoing fiscal debt concerns and expectations for abundant bond supply, compounded by persistent worries about sticky inflation. “As the federal government becomes more deeply indebted, it must issue more bonds—increasing the supply of government debt in the market. Without a commensurate rise in demand from buyers, that additional supply could drive yields up and prices down on government bonds,” Fidelity explained. Adding to this upward pressure are renewed expectations for a Bank of Japan (BOJ) rate hike and the continued rise in Japanese Government Bond (JGB) yields. The ultra-low JGB yields seen throughout the 2010s and during the COVID helped suppress borrowing costs across many advanced economies by exerting downward pressure globally. The dollar index has also become less sensitive… The post Bulls’ Fed Rate Cut Optimism Challenged by Resilient Bond Yields appeared on BitcoinEthereumNews.com. As crypto bulls pin their hopes on Federal Reserve (Fed) rate cuts to drive a sustained decline in bond yields and the dollar, signals from the bond market tell a different story. The Fed is expected to cut rates by 25 basis points to the 3.5%-3.75% range on Dec. 10, continuing the so-called easing cycle that began in September last year. Several investment banks, including Goldman Sachs, expects rates to drop to 3% next year. An expected drop in interest rates typically weighs on Treasury bond yields and weakens the dollar index, both of which support increased risk-taking in financial markets and bodes well for digital asset such as bitcoin BTC$87.058,23, XRP$2,0191, solana SOL$127,20, DOGE$0.1358 and others. But that’s not happening of late. The yield on the 10-year Treasury note continues to hover above 4% in familiar ranges. Moreover, it is up 50 basis points since the Fed’s first rate cut in mid-September 2024. The U.S. 10-year yield is up 50 bps since the first Fed rate cut in September 2024. (TradingView) The stickiness in Treasury yields likely stems from ongoing fiscal debt concerns and expectations for abundant bond supply, compounded by persistent worries about sticky inflation. “As the federal government becomes more deeply indebted, it must issue more bonds—increasing the supply of government debt in the market. Without a commensurate rise in demand from buyers, that additional supply could drive yields up and prices down on government bonds,” Fidelity explained. Adding to this upward pressure are renewed expectations for a Bank of Japan (BOJ) rate hike and the continued rise in Japanese Government Bond (JGB) yields. The ultra-low JGB yields seen throughout the 2010s and during the COVID helped suppress borrowing costs across many advanced economies by exerting downward pressure globally. The dollar index has also become less sensitive…