Bond investors, concerned about persistently high inflation, have decreased their holdings of longer-dated U.S. Treasuries in anticipation of the Federal Reserve's two-day monetary policy meeting this week, during which it is expected to keep interest rates unchanged.
The Federal Open Market Committee (FOMC) of the U.S. central bank is widely anticipated to maintain its benchmark overnight interest rate in the 5.25%-5.50% range for the seventh consecutive meeting on Wednesday. Fed Chair Jerome Powell is expected to continue emphasizing a cautious approach to easing monetary policy in his press conference, though he is unlikely to signal any urgency to cut rates soon due to ongoing inflationary pressures and a robust labor market. The U.S. rate futures market has scaled back expectations for policy easing this year and is currently pricing in one 25 basis-point rate cut in 2024, likely in November or December, according to LSEG calculations.
Investors are also keenly w ...
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