Recent softening in August PCE inflation—headline at 3.4% versus 3.7% expected and core measures also cooler—has reduced October Fed rate-hike odds to the mid-20s percent range from near 70% a week earlier, easing pressure on the front end of the curve. The 2-year Treasury yield, which tracks near-term policy expectations and closed at 4.78% on October 1 after an intraday dip toward 4.76%, has traded in a volatile range near multi-year highs amid elevated oil prices, fiscal supply concerns, and resilient growth data. Traders are watching Friday’s September nonfarm payrolls and subsequent inflation releases for signals on whether the Fed will deliver one or more additional hikes this year versus pausing, with the 2-year sensitive to any repricing of the terminal rate path.