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 report. On April 15 (UTC+8), after data showed gasoline prices rising due to the Iran war and U.S. March inflation accelerating, bond traders trimmed their bets slightly that the Federal Reserve will cut rates once this year. Pricing in the Friday interest-rate swap market indicated a roughly one-in-three chance that the Fed will cut rates by 25 basis points this year, little changed from before the data release. After the report was published, U.S. Treasury bills edged lower, with yields across all maturities rising by two to three basis points. Tom di Galoma, Managing Director of Mischler Financial Group, said, “Today’s CPI data won’t support bond prices because next month’s inflation report will create more trouble for investors and the Fed.” (Source: Jin10)

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