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Treasuries Surge as Traders Dial Back Fed Bets on Recession Fear

  • Swap market tilt toward hike of 50 rather than 75 in September
  • Business activity in US contracts for first time since 2020
Bloomberg business news
WATCH: Jerome Schneider at Pimco says investors should hedge against potential risks by raising cash levels and taking advantage of higher relative rates in the front-end of global curves. He speaks on “Bloomberg The Open.”Source: Bloomberg
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Treasuries rallied sharply after data showing a contraction in US business activity for the first time since 2020 heightened fears the economy will plunge into a recession.

The slide in bond yields gathered pace on Friday, with the weak economic reading spurring bets the Federal Reserve will reduce the size of rate hikes to half a point in September after an all-but-certain 75-basis-point increase in July. The 10-year yield sank below 2.8%.