Two-year treasuries fall as investors expect small rate cuts

Two year treasuries fell on Thursday on expectations that the Federal Reserve will be slowing rate cuts to avoid stoking further inflation.

The two-year treasury note fell 2/32 in price to yield 2.142 percent, its firs yield above 2 percent since late February. Ten year treasury notes rose 4/32 in price to yield 3.708 percent

Futures traders on the Chicago Board of Trade were betting that the Federal Reserve will only make a quarter point cut in interest rates during its next meeting on April 30.

There is a 98 percent chance of a quarter point cut, according to futures investors, compared with 46 percent a week ago who believed there would be a half percent cut.