Bond traders expect Fed rate cuts as economy faces uncertainty
6 things that changed for the stock market over the weekend That doesn’t rule out further bouts of volatility. Conflicting data may raise doubts, and Fed officials are likely to keep reminding the market that they are in no hurry to ease.
Completing a big week of Fed speak before a customary pre-meeting communications blackout period begins, chair Jerome Powell on Friday said that while policy was well into restrictive territory, it was “premature" at this stage to speculate on when policy might ease. His pushback didn’t stop bond traders from sending the market even higher.
US Fed to move ‘carefully’ on interest rates, says Chair Jerome Powell US Treasuries may well have moved too quickly, and traders have been burned before betting on a pivot prematurely. But there is a sense that yields have peaked for the cycle, and that softening data will at some point compel a chunk of the near $6 trillion of record cash sitting in money market funds into longer-dated Treasury yields above 4%.
Even after a 60 basis-point drop last month, benchmark Treasury yields remain notably above the lows set earlier this year, when recession fears were fanned by US bank failures. US markets surge in November on soft landing hopes “The Fed has ratified market moves by saying the data has softened and that has given the market more comfort and they tend to run with narratives and take things a little too far," said Michael Cudzil, portfolio manager at Pimco.
“There is also a possibility that the slowing data is something more nefarious." A barrage of data next week will test the mettle of bond bulls, culminating in the latest US employment report. Economists surveyed by Bloomberg expect a rebound in hiring for November, to 200,000 from the
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