Treasury Bonds Surge as Investors Bet on Over 1 Percentage Point of Fed Rate Cuts by End of 2023
• Long-dated US Treasury bonds have entered a bull market as falling yields signal Fed rate cuts
• The iShares 20+ Year Treasury Bond ETF has surged 21% since late October lows
• Investors anticipate substantial Fed rate cuts in 2023 as inflation cools further
• The 20-year Treasury yield has plunged over 1% point since mid-October to around 4.24%
• Markets see high chance of rates falling to 4% or less by end of 2023, implying over 1 percentage point of cuts