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Traders Bet on 2023 Fed Cuts That Aren’t Powell’s ‘Base Case’
Treasury yields plunged as traders boosted bets on how much the Federal Reserve might need to lower interest rates this year even as the central bank lifted its benchmark and Chair Jerome Powell said cuts aren’t something he expects. The moves came despite the central bank hiking its benchmark by a quarter-point and signaled that it expects more tightening after that. It did however tweak its language around the outlook. The rally in Treasuries took the yield on the two-year yield down by as much as 25 basis points to 3.91%, before shifting back to around 3.99%. The swaps market shows a bit more than a one-in-two ... (full story)