U.S. Treasuries capped off their third consecutive week of gains, as investors increasingly bet that the Federal Reserve is preparing to lower interest rates at least twice before the end of the year. The Bloomberg U.S. Treasury Index climbed 0.8% over the past week, marking its strongest stretch since early April and setting the stage for what could be its best monthly performance since February.
This bond market rally has been powered by a string of economic data that bolstered expectations for Fed rate cuts, as well as speculation that President Donald Trump may appoint a more dovish Federal Reserve Chair. Additionally, Fed Governors Christopher Waller and Michelle Bowman recently indicated that they’d be open to a rate cut as soon as the Fed’s next policy meeting.
“The market really got excited around the idea of a more dovish Fed,” said Gregory Peters, co-chief investment officer at PGIM Fixed Income. “Now,…
