Treasury Yields at Year’s Highs Draw Buyers Despite Fed Rethink
- Markets price in 60 basis points of rate cuts for the year
- Investors look ahead to US inflation data on Wednesday
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Treasury yields reached their highest levels of the year Monday — where they swiftly attracted buyers — as traders decided two Federal Reserve interest-rate cuts are likelier than three this year.
Loss of faith that the Fed will deliver on the three quarter-point rate cuts that policy makers last month said they expected began gathering pace on Friday in response to strong March employment data. Swap contracts that predict Fed rate changes on Monday priced in around 60 basis points of easing this year beginning in September, a view that assigns less than 50% odds to a third cut.