Economics
Bond Market's Marching Orders to Fed: Don't Dawdle on Rate Cuts
- Traders pricing in more than quarter-point cut in July
- Fed will ‘end up following the markets,’ strategist says
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It looks like the U.S. Treasury market has goaded the Federal Reserve into shifting gears on interest rates, to consider the first reduction in more than a decade. Now, the world’s biggest bond market has further marching orders for Chairman Jerome Powell and his colleagues: Don’t dawdle on those cuts.
The Fed on Wednesday scrapped its use of “patient” in describing its approach to policy changes, roughly three months after bond markets began clamoring for lower borrowing costs. Eight of 17 Fed officials forecast a cut by the end of the year as the Federal Open Market Committee took note of greater economic uncertainties.