Traders Boost Bets on US Rate Cuts This Year After CPI
- Policy-sensitive two-year yields fall as peak rates in view
- Some economists still wary that soft landing may prevent cuts
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Bond traders added to wagers that the Federal Reserve will cut interest rates before the end of this year after a report signaled easing inflation pressures.
Swaps linked to Fed meetings reflect an approximately 80% chance of a quarter-point hike next month following consumer-price data released Wednesday, after that probability fell to a little over two-in-three earlier. Swap pricing also showed expectations for the effective fed funds rate in December to be nearly a half point below the current 4.83% level, a deeper degree of easing than anticipated late Tuesday.