Bond Traders Reload Fed-Cut Wagers After PPI Data: Markets Wrap
- S&P 500 little changed Friday, while notching weekly advance
- Oil climbs as strikes against Houthis raise Middle East risks
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Treasury two-year yields dropped to the lowest level since May as a surprise decline in producer prices reinforced bets on Federal Reserve rate cuts this year.
Traders are pricing in an about 80% chance of a Fed reduction in March — up from a little over 50% a week ago. Friday’s economic data came a day after a hotter-than-estimated reading on consumer prices — underscoring the bumpy path officials face in bringing inflation to the 2% target. Investors also sifted through bank results as the US earnings season kicked off, while watching geopolitical developments ahead of Monday’s Martin Luther King Jr. Day.