Traders Pull Forward First Full Fed Rate Cut to November Ahead of Jobs
- Investors recalibrate bets as Powell strike less hawkish tone
- Two-year Treasuries had their best two-day rally since January
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Bond traders pulled forward their expectations for the Federal Reserve’s first interest-rate cut, fueling a rally in Treasuries ahead of a key US jobs report that will shed light on the state of the economy.
Money markets are fully pricing a quarter-point cut by November compared with December previously, and a 50% chance of a second reduction this year. The yield on two-year notes tumbled 16 basis points from a high earlier this week, their biggest two-day drop since January. The bonds were little changed at 4.88% on Friday.