##  [# Bond ETFs Slide as Powell Pushes Back on Rate Cut Expectations](/sections/features/bond-etfs-slide-powell-pushes-back-rate-cut-expectations) 

 

# Bond ETFs Slide as Powell Pushes Back on Rate Cut Expectations

 

 

Powell said a December rate cut isn’t a done deal.



 

 

 

 

 [![sumit](/sites/default/files/styles/author_image_icon/public/2023-03/Sumit_0.png?itok=SO-7S5SH "sumit")](/authors/sumit-roy) 

[By Sumit Roy ](/authors/sumit-roy)

 Oct 29, 2025

 Edited by: ETF.com Staff

 

 

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Bond ETFs tumbled on Wednesday after Federal Reserve Chair Jerome Powell signaled that another rate cut at the December FOMC meeting isn’t guaranteed, contradicting market expectations for an almost certain move.  
  
As widely anticipated, the Fed lowered its benchmark federal funds rate by 25 basis points to a target range of 3.75% to 4%. But Powell struck a more cautious tone about the path ahead.  
  
“In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December,” Powell said in a press conference following the decision.   
  
“A further reduction in the policy rate at our December meeting is not a foregone conclusion—far from it. Policy is not on a preset course.”  
  
Following his comments, futures markets pared back expectations for another cut in December. According to CME FedWatch data, the probability of a rate cut next month fell to about 66%, down from around 90% before Powell spoke.  
  
Yields surged in response. The 2-year Treasury yield jumped 11 basis points to 3.6%, while the 10-year climbed 9 basis points to 4.07%. The 30-year yield rose 7 basis points to 4.6%.  
  
Among ETFs, the [**iShares 20+ Year Treasury Bond ETF (TLT)**](/tlt) dropped 1%, and the [**iShares 7–10 Year Treasury Bond ETF (IEF)**](/ief) fell 0.65%.  
  
The 10-year yield has hovered near 4%—close to its lowest levels of the year—for the past two weeks, and Wednesday’s move reflected a bounce off that key level as investors digested Powell’s remarks.  
  
Powell noted that risks remain on both the inflation and employment fronts and cited the ongoing government shutdown as a challenge to the Fed’s data-driven approach.  
  
If the shutdown continues, that could be another reason to pause in December, he noted, adding that little has changed since the Fed’s last meeting in September, when policymakers cut rates for the first time this year.   
  
Inflation, he said, remains above the Fed’s target but excluding tariff effects, is “not far” from the 2% goal.

Despite Powell’s caution, markets still expect roughly three additional rate cuts between now and mid-2026. The evolution of economic data will ultimately determine the Fed’s next moves.



 

 

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 [ Sumit Roy Senior ETF Analyst ](/authors/sumit-roy) 

 

 

  Sumit Roy is the senior ETF analyst for etf.com and author of (Don't) Invest Like a Pro. He creates a variety of content for the platform, including…   [View Bio](/authors/sumit-roy)

 



 

 


 Related Topics  [Bond](http://www.etf.com/topics/bond) 

 [Fixed Income](http://www.etf.com/topics/fixed-income)