Why are bond yields so low when Fed is cutting rates? Fed cut its rates for the first time in 10 years in July and it is about to cut the rates at least by 25 basis points during its September meeting.

Usually, when Fed cuts the rates the bond yields should go up as the economy will expand instead of contracting. But why are the yields of the bonds so low?
Perhaps you are confusing bond prices with yields? When bond prices go up, payments relative to the price the bonds are purchased will go down, and thus by definition yields go down.

The Fed mainly controls rates through open market operations, and more recently quantitative easing. In short, when attempting to cut rates, the Fed purchases securities such as US government bonds and in turn injects Federal Reserve Notes into the system. This has the two simultaneous effects: it raises the prices of bonds purchased and thus lowers their yields, and increases the money supply, lowering interest rates.