U.S. bond market positions update: Bond traders are betting that the Fed rate cuts will continue until 2027.

Traders in the futures and options market in the United States are heavily betting that the Federal Reserve will continue to cut interest rates until next year, rather than switching to raising rates as previously expected. The deep inversion in futures spreads linked to secured overnight financing rates indicates that the market is pricing in a more prolonged period of monetary easing. The debate over whether artificial intelligence will lead to job losses has changed market expectations. On February 24, Federal Reserve Governor Lisa Cook warned that the Fed may not be able to effectively combat the rise in unemployment caused by the proliferation of AI. The market believes that, in addition to data center construction and energy demand, AI fundamentally has a deflationary effect, which has led to a rebound in long-term US Treasury bonds.