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Rates Traders Only Have Eyes for Fed in Markets Floored by Virus

  • Futures starting to price in easing before March meeting
  • Investors see potential for coordinated central-bank action
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Fed Will Cut Rates Three Times and May Restart QE, Sri-Kumar Says

U.S. markets face the week ahead in crisis mode, lobbying the Federal Reserve hard for action. It looks like nothing short of extraordinary measures can put a floor under rates.

In the throes of panic over the global spread of the coronavirus, yields in the world’s biggest government-debt market dropped off the charts last week. The 10- and 30-year benchmarks are already at record lows and the two-year is heading there fast as traders add to bets on aggressive rate cuts. It’s as if last year’s 75 basis points of easing never happened: The market wants 100 more, and futures are close to pricing in a move even before the next meeting.