The Treasury Secretary pointed to two-year Treasury yields as a signal that the market is ready for interest rate cuts from the Fed.

Treasury Secretary Scott Bessent hinted the Federal Reserve ought to consider cutting rates by pointing to how shorter-dated Treasury yields, which are sensitive to monetary-policy expectations, have moved steadily lower in recent weeks.

The bond market is sending a signal that the Federal Reserve should be cutting interest rates, U.S. Treasury Secretary Scott Bessent said on Thursday, noting that yields on 2-year Treasury notes were lower than central bank's policy rate.