Treasury Traders See Potential for First Annual Gain Since 2020 After Massive Rally
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Bond traders now see a chance for US Treasuries to post an annual gain for the first time since 2020, after a huge rally this past week.
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Ten-year yields plunged about 25 basis points amid confidence the Fed is done hiking rates, sparking hopes to avoid a third straight year of losses.
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Even a flat return would be welcomed after Treasuries lost a record 12.5% in 2022 on Fed tightening and inflation worries.
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Traders are betting on Fed rate cuts by mid-2024 as economic growth slows and inflation cools.
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Risks remain as yields have reversed lower moves before, and some doubt the Fed will ease policy as soon as expected.