Investors are no longer pricing in a Federal Reserve rate hike later this year, but they expect a higher-for-longer policy stance.
Last week’s futures market data indicated that traders were betting the central bank would raise interest rates in October or December to address rising war-driven inflation pressures.
Wall Street backed off this forecast to start the trading week, but markets still anticipate tighter monetary policy for longer.
Traders have signaled that the next quarter-point rate cut will take place in September 2027, according to new CME FedWatch data.
The two-year Treasury yield, which typically tracks Fed policy expectations, also registered a sharp pullback, falling about nine basis points to around 3.83 percent….