U.S. Treasury bonds fell for a second consecutive day as traders significantly lowered their expectations of a rate cut by the Federal Reserve.

US Treasury bonds fell for the second consecutive day, as traders significantly reduced their bets on the size of the Fed's rate cuts this year. Short-term bonds led the decline, with the 2-year Treasury yield rising by 12 basis points to 3.59% at one point. Currently, the market's expectation of a second 25 basis point rate cut by the Fed this year has dropped to around 50%, while just last Friday, traders were factoring in two rate cuts. This trend is part of a global bond market sell-off, as investors worry that a US-Israeli war with Iran could reignite inflation, prompting a faster sell-off of bonds. Some investors who had bet on stable interest rates for a long time are now hurriedly reassessing their prospects.