(Bloomberg) — US bonds tumbled on Monday, deepening a rout triggered by strong labor-market data that caused traders to sharply ratchet back bets on aggressive Federal Reserve interest-rate cuts.
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The declines pushed key yields above 4%, levels last seen in August, as investors abandoned their bullish bets on Treasuries. For the first time since Aug. 1, money markets imply fewer than 50 basis points of rate reductions through the end of the year. Traders now see just an 80% chance the Fed cut rates by even 25 basis points in November.
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“The discussion is shifting into whether there’s going to be a cut at all,” said Jan Nevruzi, an interest-rate strategist at TD Securities. “Things are not looking as bad from an economic perspective, and that leads you to reprice the Fed.” TD continues to expect a quarter-point cut in…
