According to Jinshi Data, after the weaker-than-expected employment data released last Friday caused a sharp drop in U.S. Treasury yields, Danske Bank confirmed that the 12-month target for the 10-year U.S. Treasury yield remains at 4.35%.

Analysts said Powell stressed that the Fed is data-dependent, but not a single data point, suggesting the FOMC would need to see more weak data before cutting rates as much as currently reflected in the front end of the secured overnight financing rate curve.

If future data is not as weak as expected, the market will soon begin to expect that the previous sharp drop in US Treasury yields will be unsustainable.