The market expects only about a one-in-three chance of a 25 basis point rate cut this year; investors may face greater challenges next month.

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ME News message: On April 15 (UTC+8), after data showed that gasoline prices rose due to the Iran war and that U.S. March inflation accelerated, bond traders slightly reduced their bets that the Federal Reserve will cut interest rates once this year. Pricing in the Friday interest-rate swap market showed that the probability the Fed will cut rates by 25 basis points this year is about one-third, which changed little compared with before the data release. After the report was published, U.S. Treasuries edged lower, and yields across all maturities rose by two to three basis points. Tom di Galoma, Managing Director of Mischler Financial Group, said, “Today’s CPI data will not support bond prices, because next month’s inflation report will bring more trouble for investors and the Fed.” (Source: Jin10)

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