Bruised bond markets await Wednesday’s decision from the US Federal Reserve on interest rates with more than a little unease. Almost no one expects the Fed to do anything but keep its benchmark rate unchanged at 5.25 per cent.
But such is the battered state of bond markets that they are likely to be acutely sensitive to the statement accompanying the decision. In choosing to bet on a hard landing for the US economy, rather the Fed’s view of a steadily moderating US economy, bond investors have been routed.
