Bond Traders Step Up 2026 Fed Cut Bets After Trump Bashes Powell

Bond traders are boosting bets that the Federal Reserve will cut interest rates more aggressively next year, as speculation mounts that an eventual change of leadership at the central bank will deliver the easier monetary policy that President Donald Trump is demanding.

Their conviction is showing up in the yield spread between SOFR futures maturing in December 2025 and December 2026, which reflect expectations of how deeply the Fed will cut rates in that period.