Bond Traders Bet on Fed Rate Cut

Bond traders' big bet that the Federal Reserve is poised to lower interest rates faces a key moment this week as Powell weighs in on the economy.

Bond Market Bets Enter Decisive Stretch With Powell

Bond traders have priced in a quarter-point rate cut next month and expect at least one more by year end, according to futures markets. Powell's Jackson Hole speech is seen as a potential catalyst for policy signals.

The Jackson Hole gathering has a history of guiding policy expectations. Traders will watch for hints on inflation, growth, and when the Fed might slow the rate path, which would influence risk assets around the world.

This focus on Powell's rhetoric shows how much markets rely on a clear and credible message from the Fed. If he frames decisions as data driven and conditional, rate cuts could unfold gradually rather than on a strict timetable.

But a hawkish tilt or new data surprises could unsettle investors and push yields higher. The week tests whether confidence in the Fed can withstand a misstep or a misread signal.

Highlights

The week will reveal how clearly the Fed signals its next steps.