Traders Resume Fully Pricing In Two Fed Rate Cuts This Year

Traders are once again fully pricing in expectations that the Federal Reserve will cut interest rates twice this year as reports on US producer prices and jobless claims support a rally in the bond market.

US Treasuries surged across maturities on Thursday, sending yields down six to seven basis points to the lowest levels in a week and erasing what remained of the moves sparked by strong May employment data. The rally lowered the expected yield for an auction of 30-year bonds later in the session to around 4.84%. It peaked this week at around 4.98%.