Two-year U.S. bond tender gets record demand, underscoring the market's conviction that the Federal Reserve will start cutting interest rates this year

Investors flocked to the U.S. Treasury's two-year Treasury issue, underscoring the market's belief that the Federal Reserve will start cutting interest rates this year.The $69 billion placement matched a record, with the winning yield at 4.434 percent, more than 2 basis points below pre-issue trading levels at the 1 p.m. EST bidding deadline. It was the lowest winning yield on a 2-year Treasury issue since January, when the issue was $60 billion. John Canavan, an analyst at the Oxford Economics Institute, said the market's expectation that the Federal Reserve will lay the groundwork for a September rate cut next week was a prospect that "has sustained strong demand for short-term U.S. debt this month, which carried over into this afternoon's auction."