Bond Traders Trim Two-Year Futures Bets as Tariff Talk Picks Up
- Open interest in the maturity drops five straight sessions
- Trump has discussed tariffs on Canada, Mexico, China, EU
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Bond traders are unwinding bets on two-year Treasury futures as lingering questions around President Donald Trump’s tariff plans cloud the outlook for inflation.
Open interest, or the amount of risk held by traders, dropped in the maturity that’s most sensitive to the Federal Reserve’s policy path for five straight sessions through Tuesday. It’s sunk to the lowest level since the March contract became the most-traded maturity, back in November. The combined amount of position trimming since Jan. 14 amounts to about $5.8 million per basis point, or roughly $32 billion of cash two-year notes.