Burned Before, Bond Markets Resume Rate-Cutting Trades Worldwide
- Pimco, BlackRock among managers favoring short-dated debt
- Investors lean toward cuts from Fed, BOE, ECB starting in June
Bond traders are cautiously reloading wagers that burned them just weeks ago as the Federal Reserve and key global peers finally appear set to begin reducing interest rates as soon as June.
Previous bets that central banks would be swift to loosen monetary policy in 2024 backfired after authorities maintained their focus on above-target inflation and resilient demand. But last week’s surprise cut in Switzerland and dovish outlooks from Fed Chair Jerome Powell and his counterparts at the Bank of England and the European Central Bank leave investors with reason to once again position for easing.