Bond traders are grappling with a counterintuitive loss as U.S. 10-year Treasury yields have risen more than three-quarters of a percentage point since the Federal Reserve began rate cuts in September. Despite a third consecutive rate cut by the Fed, 10-year Treasury yields hit a seven-month high as policymakers signaled a slower pace of monetary easing for next year. A strategy of betting on short-term Treasuries outperforming long-term counterparts has gained traction amid policy uncertainty. Bond investors face challenges from the Fed's likely prolonged pause on rate changes and potential economic turbulence under President-elect Donald Trump's policies, which could drive inflation.
