Bond Traders Double Down on Fed Cut Bets in Rate Markets Rally
- Futures move closer to pricing half-point cut by year-end
- Yields slide toward year-to-date lows and breakevens tumble
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U.S. government bond markets saw a rush of buying Thursday that piled up bets on interest-rate cuts amid concern that the coronavirus will damage global growth.
Increasing anxiety over the toll and spread of the virus appears to have contributed to the momentum in trades that took the 10-year yield just shy of 1.50%, to the lowest since Jan. 31. Expectations for further easing by the Federal Reserve ramped up quickly, with fed funds futures at one point pricing in as much as 45 basis points of easing by year-end. A day earlier, the market saw a quarter point cut and 50-50 odds of another.