Traders Bet on a Treasury Rally With Two 2024 Fed Cuts Priced In
- Bullish bets re-established after last week’s inflation data
- JPMorgan Treasury client survey shows elevated net-long bets
The US Treasury in Washington, DC.
Photographer: Karen Bleier/AFP/Getty ImagesThis article is for subscribers only.
Traders are piling into bets for a surge in US Treasuries, re-entering a bullish trade they’d fled in the runup to last week’s inflation data and Federal Reserve decision.
Demand for futures contracts that stand to benefit from a rally in the bond market has roared back in the past week, with investors reinvigorated by economic indicators — from ebbing price-pressures to weak retail sales — that bolster the case for lower US interest rates. The market is pricing in two quarter-point rate reductions in 2024, compared to Fed officials’ projection for one.