Treasuries Rally With Fed Not as Hawkish as Feared: Markets Wrap
- Powell says it’s unlikely next Fed move will be a rate hike
- Fed to slow pace of balance-sheet runoff starting in June
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Bonds rallied after Jerome Powell downplayed the possibility of interest-rate hikes and the Federal Reserve said it will shrink its balance sheet at a slower pace to ease strains in money markets.
Treasuries climbed across the curve, with two-year yields dropping below 5%. Swap traders boosted bets on policy easing in 2024. At one point, markets were headed for their biggest cross-asset surge on a Fed day this year. Moves abated toward the close, with the S&P 500 turning lower as chipmakers plunged in the final hour of trading. The yen soared, fueling speculation Japan could be intervening to support the currency.