Recently, the Federal Reserve's monetary policy stance has shifted significantly, with market expectations for interest rate cuts rapidly warming up in just a few days. As of November 26th, investors are actively adjusting their strategies, increasing their bets, and widely anticipating that the Fed will implement another rate cut at its December policy meeting. This change has completely reversed the wait-and-see sentiment that persisted in the market just last week, creating conditions for further gains in the U.S. Treasury market. Futures contracts linked to the Fed's benchmark rate, particularly those expiring in January next year, saw a sharp rise in new open interest over the past three trading sessions, with this contract setting new single-day trading records consecutively last week.

Currently, according to pricing in the interest rate futures market, the probability of a 25-basis-point rate cut by the Fed at the December meeting has jumped to about 80%, whereas just a few days ago, this probability was only around 30%. This shift in expectations was initially triggered by the delayed release of the September employment data last week—which painted a mixed picture of the job market. Subsequently, New York Fed President John Williams publicly stated last Friday that, considering signs of weakness in the labor market, he believed there was room for rate cuts "in the near term." This remark further reinforced market expectations for a shift in monetary policy.

Tracy Chen, a portfolio manager at Brandywine Global Investment Management, commented on this: "Although there are still significant differences within the Fed regarding interest rate policy, it currently appears that the dovish voices advocating for accommodative monetary policy have clearly overpowered the hawks inclined to maintain a tight stance." This view also reflects that a market consensus is gradually forming, suggesting the Fed may enter a rate-cutting cycle earlier to address the risks of an economic slowdown. As the December policy meeting approaches, investors are closely watching various economic data and statements from Fed officials to gauge the future path of interest rates.