Traders are predicting five interest rate cuts by the Federal Reserve (Fed) before the end of the year, Bloomberg reports. As the news agency explains, such expectations have been formed due to the aggressive tariff measures introduced by the Trump administration.
Investors, fearing a global economic slowdown, are actively moving out of risky assets and buying Treasuries. The yield on two-year Treasuries, which are highly sensitive to monetary policy, fell 22 basis points in just one day, according to data compiled by Bloomberg.
Michael Brown, senior research strategist at Pepperstone, stressed that the markets continue to deteriorate, adding to traders' uncertainty. He said investors are hoping for an adjustment in policy either from the White House or the Federal Reserve. So far, however, neither has signaled a willingness to change its course. Under these conditions, the pressure on the financial markets persists, adding to fears of a slowdown in the global economy.