Reported 8 months ago
As optimism grows amongst investors for a US Treasuries rally, a key indicator in the bond market suggests a potential obstacle. The market view is that the economy's neutral rate may be higher than policymakers anticipate, leading to concerns about the Federal Reserve's ability to cut interest rates. This could set up a headwind for bonds, with forward contracts projecting higher US rates. As investors prepare for a potential bond rally, the debate over the neutral rate's level continues amidst economic conditions and market resilience.
Source: YAHOO