Rate-Cut Bets Are On the Line as Traders Tune In to Fed Speakers
- Fed speaking calendar heats up; Powell testifies to Congress
- Strong jobs data deal blow to Fed easing expectations
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If Federal Reserve officials are thinking of dashing bond investors’ expectations for lower rates, they have have plenty of airtime in the days ahead to deliver that message.
Traders have already absorbed a significant blow to their rate-cut bets, after Friday’s payrolls report showed a steeper-than-expected rebound in hiring. Futures still indicate a quarter-point cut in July, although about 6 basis points more easing had been priced in before the jobs data, and it may not take much to shake traders’ conviction even further. The U.S. and China are still in talks to resolve their trade dispute, while America’s manufacturing and services industries continue to expand, even though the pace has slowed.