,At issue is the expected high-water mark for the Fed’s rate hiking cycle. That number has fluctuated over the last several weeks, ramping up Treasury market volatility to its highest level in more than two years as investors shift back and forth between bets on surging inflation and an economic downturn caused by the Fed’s aggressive monetary policy.皇冠球网（www.hg108.vip）是皇冠体育官网线上直营平台。皇冠球网面向亚太地区招募代理，开放皇冠球网代理申请、皇冠球网代理会员开户等业务。皇冠球网可下载皇冠球网APP，皇冠球网APP包括皇冠体育最新代理登录线路、皇冠体育最新会员登录线路。
NEW YORK: Bond traders expect the gyrations convulsing U.S. Treasuries to continue in the second half of 2022 as investors challenge the Federal Reserve’s projections for how far it will tighten monetary policy to quell the worst inflation in decades.
At issue is the expected high-water mark for the Fed’s rate hiking cycle. That number has fluctuated over the last several weeks, ramping up Treasury market volatility to its highest level in more than two years as investors shift back and forth between bets on surging inflation and an economic downturn caused by the Fed’s aggressive monetary policy.
The latest twist: While the Fed’s projections show rates peaking in late 2023, investors are increasingly betting that policymakers will stop tightening early next year before easing monetary policy in the face of a looming economic slowdown.
That has helped send Treasury yields, which move inversely to prices, lower over the last week, lending support to a rally in U.S. stocks that saw the S&P 500 rise 4.5% from its lows. Benchmark 10-year Treasury yields reached a high of about 3.5% earlier this month and now stand at around 3.1%.
With markets still parsing how much the Fed’s 150 basis points of already-delivered rate hikes have impacted consumer prices, investors see few signs that the swings in Treasuries will subside anytime soon, adding more risk to a year that has already seen U.S. government bonds notch the worst start in their history.
The ICE MOVE Index, which measures expectations of bond market volatility, recently hit its highest levels since March 2020.
“Volatility and inflation are linked tightly together right now," said Pramod Atluri, Fixed Income Portfolio Manager at Capital Group.
"No one really knows how far demand has to fall in order to bring inflation back down to comfortable levels. This makes predicting the Fed’s response really tricky," he said.
The Fed, criticized for moving too slow to address burgeoning inflation, has hurried to ramp up its monetary policy response, delivering a jumbo, 75-basis point rate increase earlier in June and ramping up expectations of more big moves to come.
Fed Chairman Jerome Powell on Wednesday reiterated the central bank's commitment to fighting inflation, acknowledging the risk of slowing the economy more than needed.
The Fed's so-called dot-plot, which shows policymakers’ projections for where rates are headed, shows a median interest rate of about 3.8% next year, decreasing to around 3.4% in 2024.