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

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.

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.