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Traders Pull Back Wagers on Fed Interest-Rate Cut This Year
Bond traders are wiping out bets that the Federal Reserve will lower interest rates this year after the central bank held its key rates steady and signaled more monetary tightening would likely follow to cool inflation. Rates on swap contracts referencing future Fed policy meetings now reflect a peak rate of 5.32% in September, while the December 2023 contract’s rate jumped to about 5.23%. As recently as Wednesday morning, the December rate was about 15 basis points below the expected peak, implying most of a quarter-point rate cut. Longer-dated contracts continue to anticipate easing in 2024. The view that the Fed ... (full story)