Treasuries Rise as Traders Reduce Fed Bets on Fear of Recession

Swap market tilt toward hike of 50 rather than 75 in September

Source: Bloomberg BusinessWeek

Treasuries surged after data indicating the first drop in US corporate activity since 2020 fueled worries that the economy may enter a recession.

Source: Bloomberg BusinessWeek

The Federal Reserve is expected to lower the amount of rate hikes to half a point in September after an almost likely 75-basis-point increase in July, according to bets made on 22 July 2022 as bond rates continued to decline.

Source: Bloomberg BusinessWeek

Treasury bonds in the two to five year range increased, and at one point, rates decreased by more than 17 basis points. The 10-year yield dropped below 2.8%.

Source: Bloomberg BusinessWeek

After a sharp initial response to Friday's GDP news, Treasury rates declined to session lows. After trading as low as 2.73 percent, the 10-year rate dropped by 10 basis points to 2.78 percent.

Source: Bloomberg BusinessWeek

The 30-year bond fell six basis points to 2.98 percent, trading below 3 percent for the first time since the end of May. The 10-year yield dropped below 2.8%.

Source: Bloomberg BusinessWeek

On the swap market, the September increase is more likely to be 50 than 75. The US economy has its first decline since 2020.

Source: Bloomberg BusinessWeek

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