Bond Traders Bet on Biggest Fed Shift in Decades on Credit Risks
- Frenzied wagers on a July rate cut followed this week’s hike
- Gauges that have been safely ignored for years get attention
Fresh fears over a recession-inducing credit crunch are spurring bond bulls to ramp up bets that the Federal Reserve will embark on the most abrupt policy shift in almost four decades.
Just minutes after Wednesday’s Federal Reserve interest-rate hike, traders intensified their long-standing wagers on imminent cuts as renewed turmoil in regional banks sent shivers across Wall Street. At their most anxious, markets priced in a policy about-face as soon as in July.