Bond traders who’ve been stung by the market’s recent rout are turning more and more bearish ahead of what many expect will be a hawkish tilt by the Federal Reserve.
US Treasuries had their worst performance in seven months in April, with mounting evidence of economic resilience and stubborn inflation causing investors to pare back bets for Fed interest-rate cuts and load up on short bets instead. Traders who began the year positioned for multiple reductions in 2024 are now pricing in just one full quarter-point cut — and some now question whether the central bank will move at all.