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Fixed income markets experienced a sharp sell-off in the immediate aftermath of the US Federal Reserve’s October FOMC meeting, despite the committee delivering the widely expected 25bp rate cut to bring the Fed funds target range to 3.75–4.0%. The adverse reaction, characterized by rising yields (falling bond prices), stemmed directly from Fed Chair Jerome Powell’s post-decision commentary. Powell explicitly cautioned that a December rate cut was “not a forgone conclusion… far from it” , creating significant discord and repricing the market’s expectation for future policy easing. This warning effectively removed the assumption of a clear, aggressive easing path that had been priced into Fed funds futures. The long-end of the UST curve reacted negatively to this muted anticipation of a December cut. Specifically, the US 10Y yield had been hugging the 4% area but spiked up to 4.05% post-announcement, indicating a sentiment shift from looking down to looking up for a change. Furthermore, longer tenors were unhelped by the Fed’s second key decision to stop the shrinkage of its balance sheet from December 1, as the move involves reinvesting maturing Treasury securities and offsetting maturing agency MBS by buying T-bills. The T-bills buying, as a stand-alone measure, offers no benefit to longer bonds. The decision also exposed internal divisions, with two dissents: one official preferring a 50bp cut and another favoring no change. Overall, the message that the policy rate may be closer to neutral than the market previously believed upset risk assets and prompted a re-pricing of the Fed cycle, which is expected to provide continued support to the Dollar. The prevailing view among analysts is that while the economic assessment—”moderate pace” of expansion, “slowed job gains,” and “somewhat elevated inflation”—was unchanged from September , the increased uncertainty surrounding the next move drove the fixed income sell-off. Despite the market’s immediate sharp repricing, some analysts still forecast a December move with two more cuts in 2026, driven by a potentially rapidly cooling jobs market.