Bond market dials up US rate cut bets; RBA left behind

Bond markets have moved to price in as many as three interest rate cuts from the US Federal Reserve by the end of the year, with some economists suggesting the central bank could kick off its easing cycle as soon as this month.

Softer-than-expected employment and inflation data for June had already fuelled expectations of imminent rate relief in the US, with markets now fully priced for two rate cuts in 2024, starting in September. But traders have moved to price in around a 67 per cent chance of a third move by year-end.

Bloomberg