Analysis-Unraveling US rate cut bets spur investor portfolio shifts
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Investors are adjusting their portfolios as expectations for US interest rate cuts diminish. Strong economic reports and fears of rebounding inflation have led investors to believe that the Federal Reserve may lower borrowing costs prematurely. Futures markets now show that investors expect rates to fall by just 40 basis points this year, compared to the 150 basis points priced in at the start of 2024. This fading prospect of rate cuts has caused some investors to readjust their portfolios, with equity investors seeking insurance in the options market or investing in inflation hedges such as energy stocks. Bond investors are also repositioning their portfolios amidst a selloff that has hammered Treasury prices. The fading prospect of rate cuts presents a dilemma for market participants who had previously bet on policy easing.

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https://www.investing.com/news/economy/analysisunraveling-us-rate-cut-bets-spur-investor-portfolio-shifts-3374171