Rate Hike Bets Are the Battleground for Traders After Fed
- Strategists see modest rise in yields, stocks, dollar post-Fed
- Rate-hike bets still at odds with policy-maker comments
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Investors are hoping the Federal Reserve can manage the path toward rate hikes as smoothly as its taper announcement, according to strategists who are cautiously optimistic the coming months will see moderate advances for yields, the dollar and equities.
Friday’s labor report is seen as the next flash point for markets, given rates traders remain relatively aggressive about the need for Chair Jerome Powell to avoid being overly patient about hiking borrowing costs to restrain inflation. The key risks surround rate-hike bets, with the potential that aggressive moves in that market could set off fresh turmoil in bonds.