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The Fed Keeps Talking, and Bond Traders Just Get More Confused

  • Latest decision spurs biggest Treasuries rally in 17 months
  • Surprises may erode confidence in FOMC guidance, Cantor says

Treasury-market traders say the Federal Reserve has a communication problem.

Two-year notes rallied the most since October 2014 this week after central-bank policy makers cut their median projection for 2016 interest rates in half. The statement left traders seeking clarity about why, exactly, Fed officials lowered their estimates, after U.S. economic data strengthened in February even amid global market volatility.