Traders bet on rapid rate cuts as recession fears deepen

Bond prices soared globally after the world’s largest economy created far fewer jobs than expected last month, prompting investors to pile into safe havens on fears that a US recession may force the Federal Reserve and the Reserve Bank to cut rates soon.

On Friday, the two-year US Treasury yield plunged 28 basis points, its steepest one-day decline in more than a year, taking the weekly fall to a whopping 52 basis points, reminiscent of the declines seen during the pandemic and the collapse of Lehman Brothers. The 10-year US benchmark dropped 40 basis points in the week.