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Bonds Move to Price In a Half-Point Cut After Fed Reaches Peak

  • Rate cuts seen after Fed policy rate tops out in early 2023
  • Market sentiment reflects higher risk of a recession in US
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Schwab's Jones: Issuance Waiting for Yields to Fall
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The bond market on Wednesday shifted to price in a half-point rate cut in the Federal Reserve’s benchmark rate at some point in 2023, as traders upped their bets on a US recession eventually halting the central bank’s aggressive tightening campaign.

Market expectations for inflation also nosedived alongside gasoline prices, while pain in stock markets also fueled appetite for Treasuries, weighing on rates across the curve.