US treasuries wipe out 2024’s loss as traders bet on rate cuts
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US treasuries have erased this year’s declines as cooling inflation boosts bets on Federal Reserve interest-rate cuts. US treasury Index is up 0.3% this year, reversing losses of as much as 3.4% back in April. The latest move followed data that showed US inflation slowed further last month, fuelling the view among traders and economists that the Fed will start easing policy in coming months. Investors are looking for more evidence that price growth is broadly decelerating to decide whether the Fed has room to deliver more than two quarter-point cuts this year, a scenario they see as a one-in-three chance. Markets are now almost fully pricing in a 25 basis-point rate cut in September, compared with odds of only about 70% before Thursday’s CPI report.

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