email rounding up the latestUS stocks and government bonds are on course for their worst month of the year as investors respond to the Federal Reserve’s message that interest rates are set to stay higher for longer than previously thought.
A retreat in the US bond market also accelerated last week after the Fed signalled it would cut rates much more slowly next year and in 2025 than investors had been pricing in., which rises when prices fall, on Wednesday hit its highest level since 2007 and is on track for the biggest monthly jump in a year.
At the beginning of the month, traders in the futures market were betting that interest rates would be about 4.2 per cent by the end of 2024. Now they are betting on rates of 4.8 per cent by that time.policy this year,” said Kevin Gordon, senior investment strategist at Charles Schwab. “For a good chunk of the year the market expectation was it would be cutting aggressively this year . . . now there’s an embrace of ‘maybe [the Fed] actually means it’.
The S&P is still up 11 per cent this year, but has been propped up by a small number of heavily weighted tech stocks that surged earlier in the year fuelled by enthusiasm about artificial intelligence. The equal-weighted version of the index this week fell back into negative territory for the year.