Today, I executed a strategic decision to trim 70% of my bull steepener position. The rationale for this move is underpinned by several key factors:

1. A rate cut exceeding 125bps this year appears too much without further shocks from PMI and NFP data in the forthcoming month.

2. The cost of rolling 2-year futures has become so expensive, exceeding 4bps per month, with no immediate catalysts in this week.

3. Historically, the Asian trading session has often signaled short-term market bottoms, and today’s equity selloff in the Asian session may represent such a juncture.

4. The 2-year Treasury yield has encountered resistance within the 3.6% to 3.7% range, levels last observed during the market turmoil triggered by the SVB Crisis last year. Hence, I anticipate yields to remain range-bound around these levels.

I won't chase even if the 2-year UST yield falls to 3.6%. I will wait for the short-term reversal.