US 2-Year Yield Climbs as Services Data Hits 2022 High

Yield Spike: The US 2-year Treasury yield climbed from <strong class="body_output text-content_primary font-semibold" node="[object Object]">3.5103% to 3.5226% , with the total intraday gain exceeding one basis point.
Economic Catalyst: The move was driven by the February ISM Non-Manufacturing report, which showed the <strong class="body_output text-content_primary font-semibold" node="[object Object]">fastest expansion in services activity since 2022 .
Fed Policy Outlook: Robust economic data signals to investors that the Federal Reserve is less likely to cut interest rates soon, supporting higher short-term bond yields.

Services Sector Expansion Hits Post-2022 Peak

The U.S. services sector demonstrated significant strength in February, with the ISM Non-Manufacturing report showing the fastest pace of expansion since 2022. This key economic indicator suggests that business activity in the largest part of the U.S. economy remains robust, defying expectations of a slowdown and signaling underlying resilience.

2-Year Yield Rises to 3.5226% on Fed Outlook

In response to the strong economic data, the yield on the U.S. 2-year Treasury note, which is highly sensitive to Federal Reserve policy expectations, climbed from 3.5103% to 3.5226%. The move pushed the overall intraday gain to more than one basis point. This increase reflects a recalibration by bond market investors, who now see a lower probability of the central bank pivoting to interest rate cuts in the near term. A stronger economy gives the Fed more room to keep its policy restrictive to ensure inflation returns to its target.