NEW YORK, Oct 1 (Reuters) - U.S. Treasury yields across maturities fell to session lows Tuesday after the Institute for Supply Management’s U.S. manufacturing activity index fell to its lowest level since June 2009.
The two-year yield fell to a three-week low, last down 4.2 basis points to 1.580%. The two-year yield is a proxy for investor expectations of the direction of the Federal Reserve’s interest-rate policy. Expectations that the Fed will cut rates at its October meeting rose to 54.0% on Tuesday from 39.6% the previous day according to CME Group’s FedWatch tool.
Reporting by Kate Duguid; Editing by Catherine Evans