Bond Traders Betting on Rate Cut Scratch Heads on Trump QE View
- Futures signal about 70% chance of quarter-point cut in 2019
- Curve flattens as U.S. president says Fed should restore QE
Pedestrians stand in front of an illuminated American flag in the Times Square neighborhood of New York.
Photographer: Michael Nagle/BloombergThis article is for subscribers only.
The bond market remains confident after the latest U.S. jobs data that the Federal Reserve’s next move will likely be to lower rates. But traders are scratching their heads when it comes to President Donald Trump’s suggestion that policy makers should restore quantitative easing.
Traders see about a 70 percent chance of a quarter-point Fed cut in 2019, even as a report Friday showed U.S. hiring in March rebounded more than analysts expected. But that doesn’t mean the market views the economy as weak enough to justify Trump’s call less than two hours later for the Fed to open the monetary floodgates.