Now that Federal Reserve Chairman Jerome Powell has made it crystal clear that rates will be cut next month, bond traders are focusing on bets on the size of that first cut and future easing.
Powell, speaking Friday at the U.S. central bank’s annual symposium in Wyoming, said the “time has come” for the Fed to cut benchmark interest rates from their highest in two decades, his clearest signal yet that long-awaited rate cuts are imminent.
While the Fed chairman gave no indication of the extent of the cuts or the path of easing, he noted that progress had been made on inflation and said central bankers would closely monitor the health of the labor market to guide policy. His words were enough to send U.S. Treasury yields and the dollar lower and stocks higher on Friday as investors saw a green light to take on risk.
