Bond Traders Are Resolute on 2024 Fed Cuts as Data Whips Yields
- Bets on lower US rates have proved resilient as year begins
- Rates rose as much as 10 basis points Friday before moderating
This article is for subscribers only.
Treasury traders are standing firm behind wagers that the Federal Reserve will cut interest rates sharply in 2024, even as a bunch of employment and service-industry data whipsawed yields Friday.
Swap contracts tied to Fed meeting dates are again pricing in almost six quarter-point cuts and see a more than 70% chance of a quarter-point policy-rate decrease in March. While those bets pared following a job creation report that topped estimates and came with hot wages, the market quickly bounced as a deeper read into the payrolls report, large revision to November payrolls, and a soft reading on the US service sector emboldened traders.