Short-term U.S. government bonds are underperforming longer-duration Treasurys after San Francisco Fed President Mary Daly pushed back against the need for an interest-rate cut of 50 basis points at the Federal Reserve's September meeting.

San Francisco Federal Reserve Bank President Mary Daly on Monday said that given mounting evidence that the U.S. job market is softening and no signs of persistent tariff-driven inflation, the time is nearing for interest rate cuts.

San Francisco Fed President Mary Daly does not support a large interest rate cut at the next Federal Reserve meeting. She believes the labor market is not weak enough to warrant such a move. This differs from some expectations.