(Bloomberg) -- US Treasuries slipped ahead of the Federal Reserve’s interest-rate decision, with investors betting on a slower pace of monetary easing in the face of data suggesting economic resilience.

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The yield on two-year notes rose four basis points to 3.82% as traders trimmed wagers on rate cuts, seeing around three quarter-point reductions in 2025 starting in July. That compares to Thursday’s pricing of a percentage point of easing this year likely starting in June — before stronger-than-expected US economic data sparked a sharp rethink.

With the central bank expected to keep its benchmark rate steady at 4.25%-4.50% on Wednesday, traders will be scrutinizing comments by Fed Chair Jerome Powell for insight into officials’ interpretation of recent data and whether President Donald Trump’s economic policies are prompting any change in view on when to ease policy. That’s as tariffs on imported goods dents consumer confidence while also potentially fanning price pressures.

“The meeting will likely shape expectations more than usual as it is the first decision after the reciprocal tariff announcement,” said Erik Liem, a rates strategist at Commerzbank. “Verbal guidance will be key, as markets have postponed expectations” for monetary easing, he said.

For investors, it’s a question of how to weigh the economic pessimism that has been seen in some recent surveys against the resilience in top-tier measures of employment. While US consumer confidence fell in April to an almost five-year low, non-farm payrolls beat all forecasts compiled by Bloomberg.

Open interest data point to de-leveraging and position unwinds in the front end of the curve following Friday’s jobs data, consistent with liquidation of long positions. Tuesday’s JPMorgan Treasury client survey showed neutral positions remain elevated and close to yearly highs.

“It’s still tough, in my view, to have an especially high conviction call in terms of Treasuries right now,” said Michael Brown, a strategist at Pepperstone. “It remains to be seen which side of the fence bond market participants come down on in terms of the macro impact of tariffs, with downside growth, and upside inflation risks almost as prevalent as each other.”

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