The US bond market weakened across the board on Monday (February 5) local time, including Powell and other Federal Reserve officials further stressed that it is unlikely to start cutting interest rates soon, and the recent strong economic data made the market and other official institutions have raised the expectation of fundamental repair, but also "hit" the enthusiasm for rapid interest rate cuts.

As of Monday's close, U.S. Treasury yields rose, with 2-year yields up 11.7BPs to 4.483%, 3-year yields up 12.3BPs to 4.269%, and 5-year yields up 13.8BPs to 4.123%, according to the U.S. Treasury Department. The 10-year yield was up 13.7BPs at 4.161 percent, while the 30-year yield was up 11.7BPs at 4.339 percent.

Minneapolis Fed President Neel Kashkari said earlier that while the benchmark interest rate is at its highest level in more than two decades, it is not hurting economic growth, so policymakers can wait and see for a while before deciding whether a rate cut is needed.

"At least through the post-pandemic recovery, the neutral policy rate has risen, giving the Federal Open Market Committee time to complete its review of economic data before making a decision to cut rates, reducing the risk that policy will tighten too much," Mr Kashkari said in a post on his website.

A day earlier, Fed Chairman Jerome Powell said almost the same thing. "The Fed has shifted its focus to deciding when to start cutting rates, but solid economic growth means officials don't have to rush that decision," he noted. The economy is in good shape and we believe inflation is coming down in a sustainable way."

At the same time, the Organization for Economic Cooperation and Development (OECD) also raised its forecast for global GDP growth to 2.9% from 2.7% projected in November 2023, and sharply raised its forecast for U.S. GDP growth to 2.1% from 1.5%. The OECD sees U.S. inflation at 2.2 percent in 2024 and slowing further to 2 percent in 2025, which is also the lowest rate in the G7.

"There is no reason for Treasuries to rally," said senior fixed strategist at Saxo Bank. "If inflation stays above the Fed's 2 per cent target on a sustained basis, then the Fed could disappoint the market with rate cuts."