When traders think the Fed is less likely to hike, they expect lower future short-term rates, so bond prices tend to rise and yields fall — especially at the short end (the 2Y), which tracks policy expectations most closely. Remember the price/yield seesaw: as buyers bid up bonds, yields drop. Longer bonds move too but are driven more by growth and inflation expectations.

A steeper, upward-sloping curve usually reflects expectations of steady growth and/or a Fed that may ease later. Beginners should note duration: the 30Y's price swings far more for a given yield move than the 2Y, so long bonds are where big gains — and losses — happen when rates shift.

The spread (78bp) is the extra yield over safe Treasuries that compensates for default risk; tight spreads signal calm, confident credit markets. CLOs pay floating rates, so their income rises and falls with short-term rates — appealing when the direction of Fed policy is unclear, because they carry less duration risk than fixed-rate bonds.

When a central bank buys fewer bonds, a big price-insensitive buyer fades and private investors must absorb more supply — that typically pushes JGB yields up and prices down. Higher JGB yields can also unwind the carry trade, where investors borrow cheaply in yen to buy higher-yielding assets abroad; if that reverses, it can ripple into global bond and currency markets.

Government bond markets move together: when US yields fall on softer data, UK gilt yields often drift lower too, because global investors reprice how much central banks will tighten everywhere. As yields fall, gilt prices rise (the price/yield inverse), and longer-dated gilts — with higher duration — would gain the most from any such move.