Lates News

Due to Trump indicating that he may nominate someone other than Nominative Economic Committee Director Hassett to replace Powell, traders cut their expectations for two interest rate cuts in the U.S. in 2026. The drop in U.S. government bond prices pushed the two-year yield up 5 basis points to 3.61%, the highest level since the Fed's most recent rate cut in December. Short-term interest rate contracts reflected a decrease in the probability of the Fed cutting rates by 25 basis points twice this year after Trump commented on Hassett. Meanwhile, the bond market continued to be troubled by the December jobs data released a week ago, prompting Wall Street banks who had previously predicted a rate cut at the Fed's next meeting on January 28 to abandon that view. Morgan inflation economists predict that despite changes in Fed leadership, the central bank will not cut rates further. John Fath, managing partner of BTG Pactual Asset Management USA, said, "Previous trades were betting that whoever becomes the next Fed chair will be dovish. This trend has reversed in the past few days."