Despite a recent rally in US Treasuries, investors fear the global bond sell-off is far from over. Traders are closely watching the Federal Reserve’s policy meeting and press conference on Wednesday for clues about the path of interest rates. Futures markets are pricing only a 9 per cent chance of a rate rise at the October meeting, but anticipate between two and three quarter-point rises by the end of 2027.
Rob Waldner, chief investment officer at Invesco Fixed Income, believes the Fed will not raise rates, arguing that high energy prices are not solved by monetary policy. Meanwhile, concerns over US government spending continue to push longer-term borrowing costs higher, with Waldner predicting a steepening yield curve. In Europe, the European Central Bank is expected to leave its deposit rate unchanged at 2.5 per cent, but attention is focused on France’s rising bond yields and whether.
Source: Financial Times Markets · Summarized by HeadlinesBriefing