Bond Traders Curb Rate Cut Bets as War Stokes Inflation Fear
A television station broadcasts Jerome Powell speaking after a Federal Open Market Committee meeting on the floor of the New York Stock Exchange on Jan. 28.
Photographer: Michael Nagle/BloombergTraders in the futures markets are sharply reducing expectations for interest rate cuts from the Federal Reserve, as the war with Iran drives worries of an inflationary resurgence.
The view is being expressed in interest-rate futures spreads, which are tightening on bets that a war-fueled spike in oil prices could aggravate inflation and make it harder for policymakers to reduce borrowing costs this year.