Wall Street Today | Bond Traders Downgrade 2023 Fed Rate-Cut Odds to a Coin Toss

Bond traders no longer view the odds of a Federal Reserve rate cut this year as better-than-even.

As recently as mid-January it was an article of faith that the Fed’s eight rate increases in the past year had sown the seeds of a recession that would require the central bank to reverse course. Since then, persistently strong employment data and sticky inflation have traders looking for a higher peak in the central bank's policy rate and a prolonged stay at that level.

In a "markedly more bearish" swing last week, traders added nearly $3 billion of new shorts to S&P 500 futures positioning and pulled a net $5.1 billion from exchange-traded funds, the team led by Chris Montagu said.

Oil fell for the eighth month out of the last nine as US economic slowdown fears continue to dampen market sentiment. Despite the $2 monthly decline, crude supplies are showing signs of tightening as sanctions against Russia complicate purchases for the few buyers of the crude still left.