Yields Edge Higher as Fed Bets Trimmed

• US Treasuries finished modestly weaker, led by the front end as the curve flattened ahead of this week’s auction cycle and Friday’s PCE release.
• The move higher came as markets pared back Fed easing expectations, unwinding part of the Jackson Hole rally after Powell’s remarks.
• The 2-year yield rose 3bps to 3.73%, while the 10-year added 3bps to 4.28%. Focus now turns to tonight’s $69bn 2-year Treasury auction.
• Domestically, the RBA minutes are in focus, with markets looking for signals on the Board’s assessment of policy restrictiveness and labour market tightness.