Reuters Survey: The Federal Reserve will cut interest rates twice this year, with the first in June when Powell takes over as Fed Chair

BlockBeats News, February 12 — A Reuters survey shows that long-term U.S. Treasury yields will remain stable in the short term, but due to concerns over inflation and the Federal Reserve’s independence, they are expected to trend upward later this year; meanwhile, short-term yields are expected to decline mildly due to rate cut expectations. At the same time, nearly 60% of bond strategists (21 out of 37) believe that the massive issuance of government bonds in the coming years to finance Trump’s tax cuts and spending plans will make it infeasible for the Federal Reserve to significantly reduce its $6.6 trillion balance sheet.

Another Reuters survey indicates that the Federal Reserve is expected to implement two rate cuts later this year, with the first in June when Jerome Powell takes over as Fed Chair. The rate-sensitive 2-year U.S. Treasury yield is expected to fall from the current 3.50% to 3.45% by April and 3.38% by July. The median forecast also shows that the benchmark 10-year U.S. Treasury yield is expected to rise to 4.29% in one year, up from the previous month’s forecast of 4.20%. (Jin10)