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UST yields advanced across the curve, driven by a significant repricing of Federal Reserve policy expectations as market participants scaled back the likelihood of a near-term rate cut; specifically, the implied probability for a December easing move dropped markedly below 50%. The benchmark 10Y UST yield climbed approximately 3.5bp to trade around 4.146%, while the rate-sensitive 2Y UST yield moved higher by a smaller 2.1bp to 3.568%. This divergent movement resulted in a bear-steepening of the yield curve, with the 2Y/10Y spread widening to roughly 53.2bp, reflecting investor concerns over persistent inflation risks and the economy’s resilience, which challenges the previous dovish narrative. The shift in monetary outlook and a stabilization in broader risk appetite, following a relief rally in equities, pressured safe-haven demand. Outside the US, the sovereign bond sell-off was pronounced, particularly in the UK, where 10Y Gilts surged around 14bp to 4.57% on escalating fiscal concerns tied to uncertainty over planned tax measures. Japanese Government Bond yields likewise trended higher, with the 10Y JGB note hitting a post-2008 peak above 1.73%, reflecting a continuation of global yield convergence. The immediate outlook for fixed income remains tethered to the forthcoming wave of delayed US economic data, including the crucial jobs report, which is expected to provide definitive guidance on the Fed’s path. Longer duration bonds remain unfavorable given the lack of term premium and the upside risk to rates. Credit markets, while exhibiting tight spreads by historical standards, warrant a selective and cautious approach, as rising interest rate volatility is expected to increase credit dispersion and elevate default risks in weaker segments heading into 2026. The technical picture is currently bearish, demanding active portfolio management.