Futures mixed as markets await more policy cues
By Amruta Khandekar and Shristi Achar A
(Reuters) — U.S. stock index futures struggled for direction on Thursday as uncertainty about when the Federal Reserve will start easing financial conditions kept investors on edge as they awaited further policy cues from central bank officials.
Signs of a weakening labor market and a tempering of the Fed's hawkish stance at its last meeting have pulled U.S. Treasury yields down from multi-year highs, helping equities stage a stellar comeback from their October lows.
However, the rally has run out of steam as several Fed policymakers this week pushed back against market expectations that the central bank will begin cutting interest rates soon.
The benchmark S&P 500 eked out marginal gains on Wednesday, but managed to extend its longest winning streak in two years.
A majority of traders are betting that the Fed will keep interest rates unchanged this year, with odds of a cut of at least 25 basis points in May standing at nearly 47%, according to the CME Group's (NASDAQ:CME) FedWatch tool.
«The market got carried away regarding how soon it thought we would be seeing interest rate cuts being delivered. It took the message that further rate hikes were unlikely as… cuts were coming soon,» said Stuart Cole, head macro economist at Equiti Capital.
«But that was never the case and comments from various CB (central bank) officials this week have very much opened eyes to this.»
The yield on the benchmark ten-year Treasury note was largely steady at 4.5255% while that on the two-year note, which best reflects short-term rate expectations, inched up to 4.9487%.
Chicago Fed President Austan Goolsbee said the U.S. central bank will need to pay close attention to the effects of higher longer-term
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