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Bond Traders Pare Odds of Fed Rate Cut in March to Coin Toss
Bond traders abandoned wagers that the Federal Reserve will cut interest rates in March, pushing swap rates to levels consistent with only about 50% odds of a quarter-point reduction in the federal funds target during the first quarter. During the past month, they’d come close to fully pricing in such a move at various points in response to economic data and revised forecasts by Goldman Sachs and Barclays that cuts would begin in March. The latest shift in the market-implied odds of a March rate cut was motivated in part by stronger-than-expected December US retail sales data. It also reflected a selloff in UK ... (full story)