Bond Traders Cave to the Fed by Dialing Back Their Rate-Cut Bets
- Derivatives show market, Fed expectations are getting in sync
- A wide gulf remained between the two as recently as December
The Marriner S. Eccles Federal Reserve building in Washington, DC.
Photographer: Ting Shen/BloombergThis article is for subscribers only.
Bond traders are finally heeding one of the market’s oldest lessons: Don’t fight the Fed.
As the Federal Reserve pushed through its steepest interest-rate hikes in decades, investors consistently misjudged how far it would go, handing them steep losses in 2022 as Treasuries tumbled.