Fed Pivot Trade Sparks Again as Bonds Rally, Dollar Weakens
- Treasury two-year yield dips below 4% as traders trim Fed bets
- Softer JOLTS report boosts bonds, ahead of US payrolls Friday
This article is for subscribers only.
Global bonds and stocks are rallying on hopes that the latest signs of weakness in the US economy will push the Federal Reserve to rethink the aggressive monetary policy tightening that some fear will trigger a recession.
The so-called Fed pivot has long been hoped for, and it received another boost on Tuesday with data showing the number of US job openings fell 1.1 million in August, the biggest drop since April 2020 that the US central banks wants to see as it seeks to cool the economy and elevated inflation. The Jolts reading was the lowest since June of last year and the data briefly pulled Treasury yields back towards their session lows, building on a big decline from Monday.