Bond Markets Still Parsing the Fed's Message from Wednesday

Nikkei 225 slips on BoJ signals while the Fed’s dot plot muddle keeps Treasuries on edge

Key Takeaways

• Fed’s Dot-Plot Split Leaves Bond Markets on Edge: Fixed-income investors are still parsing the details of Wednesday’s FOMC meeting and realizing that while the median dot-plot is indeed predicting two more rate cuts for the balance of this year, it is a really close call. Six of the nineteen policymakers penciled in no more cuts this year, one has called for a hike, and another two put down just one more cut. Futures are priced 80% of the way for two more moves this year, so if this investor expectation gets kyboshed, Treasuries could be in for a spot of trouble, as was the case exactly a year ago.