Bond Traders Prep for Dot Plot, With Three Cuts in Question
- Median Fed forecasts last showed 75 basis points of 2024 cuts
- Long-run rate may also be under scrutiny amid rising debt
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After dialing back their expectations for 2024 Federal Reserve interest-rate cuts substantially since the start of the year, bond traders on Wednesday will take their next cue when policymakers release their own updated projections for their benchmark.
Coming on the heels of consumer and producer price reports warning of persistently high inflation, there’s a lot riding for the Treasuries market from the Fed’s new so-called dot-plot. The median forecast of Fed policymakers in December showed three quarter-point rate reductions for 2024, and derivatives contracts show slightly more than that priced in as of Thursday.