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If Powell Gives an Inch, Bond Traders May Ask Fed for a Mile

  • Swaps signal three Fed cuts in 2019 and a fourth in late 2020
  • But markets may want that fourth cut sooner, strategist says
Bloomberg business news
Markets Prep for the Fed to Join the Global Easing Cycle

As Federal Reserve Chairman Jerome Powell tries to explain what’s likely to be the central bank’s first rate cut in more than a decade on Wednesday, it won’t take much for the market to get even more aggressive and ask for additional easing sooner.

The swaps market shows traders pricing in nearly three 25-basis-point cuts by January, and another quarter-point reduction by the end of 2020.