A Big Bond Rally Needs a Recession With Fed Wary of ‘Head Fakes’
- Traders look for Fed to make policy less restrictive next year
- But Powell plan to ‘move carefully’ is recipe for volatility
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Up and down Wall Street, it’s becoming increasingly clear that the US bond market won’t see a sustained rally unless the economy surprises even the Federal Reserve by falling into a deep recession.
Over the past three years, Treasuries staged several false rebounds from the deepest rout in decades, only to reverse course, sending yields higher again and burning those who had bet big on the swing.