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Bond Traders Face Plenty of Risk as Powell Ushers In a New Era

  • Post-Fed presser, trade talks, payrolls may fuel yield swings
  • Also ahead: Treasury set to detail quarterly borrowing plan
Jerome Powell
Jerome PowellPhotographer: Al Drago/Bloomberg

Treasury traders are bracing for heightened volatility next week as Federal Reserve Chairman Jerome Powell ushers in a new era of press conferences after every meeting, while the U.S. and China meet again for trade talks.

Officials are expected to keep interest rates unchanged following nine hikes since 2015. But investors see scope for the Fed’s statement to tilt dovish, or for Powell to signal as much in his comments, a shift that could help drive yields lower. Also in focus -- any hint that the central bank is closer to ending its balance-sheet runoff, which, combined with the deal to reopen the government, could bolster risk sentiment at the expense of Treasuries.