Fed Policy Seen on Hold This Year, Next Step Likely a Cut -- Market Talk

Dow Jones05-08 18:38

1038 GMT - BlueBay continues to see no change in Federal Reserve policy in 2026, but it starts to become more confident that the next move in U.S. interest rates will be lower, rather than higher, once inflation starts to fall into 2027, CIO Mark Dowding says in a note. BlueBay feels that five-year U.S. Treasury yields are unlikely to keep rising beyond 4%, he says. BlueBay has switched an inflation breakeven trade on medium-dated U.S. inflation-linked Treasurys, or TIPS, into an outright long in inflation-linked bonds with yields at this level. The five-year Treasury yield falls 2.6 basis points to 4.017%, according to Tradeweb. (emese.bartha@wsj.com)

(END) Dow Jones Newswires

May 08, 2026 06:38 ET (10:38 GMT)

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