Bond Traders Look to US CPI to Buttress Half-Point Rate Cut Bets
- Swaps price in roughly 36 basis points of easing in September
- PPI data on Tuesday boosted sentiment in the Treasury market
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Investors who’ve positioned for even more gains in the Treasury market are looking for US inflation data that reinforces the case for a faster pace of Federal Reserve interest-rate cuts.
Traders are split on whether the central bank will opt for a quarter- or half-point reduction in September, with swaps pricing in 36 basis points worth of easing. In all, they see about one percentage point worth of cuts in the remaining months of 2024.