Traders’ Uncertainty About Fed Decision Is Highest Since 2007
- Market remains split on size of Wednesday’s expected rate cut
- Most Fed rate moves have been better anticipated by this point
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Not since the lead-up to the financial crisis have bond traders been so divided about the outcome of the next Federal Reserve decision.
With only two days to go, whether Fed policymakers will cut interest rates by a quarter-point or a half point is considered a tossup in US interest-rate markets. Except for the Fed’s emergency rate cut in March 2020 at the onset of the pandemic, that’s the greatest amount of doubt in interest-rate swap markets for any scheduled US central bank decision since 2007, according to data compiled by Bloomberg.