U.S. government bond investors are shifting their focus to holding short-term government bonds, betting that the Federal Reserve will ultimately succeed in curbing inflation. This comes after the two-year government bond yield surged to a multi-year high of approximately 4.75% following the Federal Reserve's first rate hike in 2023. The futures market anticipates a further 80 basis points of tightening over the next year, indicating that Chairman Warsh's commitment to fighting inflation is gaining traders' trust.