Subadra Rajappa, head of US rates strategy at Societe Generale, expressed concern that the market is currently pricing in too many Federal Reserve rate cuts. This sentiment was shared during an appearance on "Bloomberg Surveillance: The Fed Decides." She highlighted that the lack of market volatility is "troubling," suggesting a potential complacency among investors regarding future interest rate movements.
Rajappa also pointed out that the long end of the bond market has become more volatile as of September 16, 2026. This increased volatility at the longer end contrasts with her earlier observations about a general lack of market volatility. Earlier in the year, on March 9, 2026, Rajappa, then head of research at Societe Generale Americas, stated that US Treasuries were "not a good flight to quality hedge in this environment," indicating a more skeptical view on their traditional safe-haven role.
Separately, other market news indicates rising US Treasury yields, with the 30-year bond yield hitting its highest level since June 2004, reaching 5.5016% on September 24, 2026. This rise in yields is attributed to strong economic data and comments from Federal Reserve officials, including Michael Barr, Philadelphia Fed President Anna Paulson, and New York Fed President John Williams, suggesting further rate hikes are likely to curb inflation. Traders are now pricing in a roughly 70% chance of another rate increase at the Fed's next meeting in October, up from 66% the previous day.
