Central Banks
Fed Traders See Pivot From Rate Hikes to Rate Cuts in Second Half
- Swaps market ramp-up policy rate cuts from June peak rate
- Odds of March pause rise, hike premium drops from May meeting
Jerome Powell speaks during a news conference following a Federal Open Market Committee meeting in Washington, DC, on Feb. 1.
Photographer: Al Drago/BloombergThis article is for subscribers only.
Traders in the interest rate swaps market have concluded after the Federal Reserve rate decision that policy direction is set for a deeper dovish pivot from the middle of this year.
Swap contracts tied to this year’s Fed meetings show approximately 50 basis points of rate cuts are now firmly priced between the June policy peak of 4.90% to the 4.40% overnight lending rate tied to the December policy meeting.