Bond Traders Are Vindicated as Powell Sets Up September Fed Cut
- Fed chair’s Jackson Hole speech cement policy path this year
- Traders betting at least quarter point reduction next month
This article is for subscribers only.
Bond investors’ big bet on US Treasuries is paying off after Federal Reserve Chair Jerome Powell cemented expectations for an interest-rate cut next month.
Treasuries rallied on Friday, pushing down yields on policy-sensitive two-year notes by as much as 10 basis points to 3.90%, after Powell said during a speech in Jackson Hole, Wyoming, that “the time has come for policy to adjust.” Those comments vindicated many in the bond market who have been adding to wagers the central bank will cut soon — and perhaps big.