TREASURIES-Yields hit 10-month high as Fed seen holding rates higher for longer

Investors have adjusted their interest rate expectations over the past few weeks to account for the likelihood that the U.S. central bank may not cut rates next year as much as previously expected, and that it may stop cutting rates at a higher level. “The market’s been expecting cuts, and now they are starting to price in the potential for rates to remain high for a much longer period than previously expected,” said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities in New York. In addition, the Fed is expected to stop cutting rates at around 3.8%, much higher than the previously expected 3.3% level.