Fed rate cut expectations increase, helping steepen the US bond curve

On September 17, Jinshi Data reported that analysts at Faber Bank said in a report that the possibility of a 50 basis point rate cut by the Federal Reserve this week has increased, leading to a "Bull Market Steepening" of the US Treasury yield curve, that is, the rate of decline in short-term bond yields is faster than that of long-term bond yields, which may gain momentum. "If the Federal Reserve really cuts interest rates by 50 basis points, this situation may continue, as the possibility of cutting interest rates by another 50 basis points in November may rise." Analysts said that if the market believes that the main reason for the Federal Reserve's aggressive actions is the risk of an economic hard landing, then the trend of the Bull Market Steepening is more likely to continue. According to data from LSEG Refinitiv, the currency market is currently expecting the Federal Reserve to cut interest rates by 119 basis points at the remaining three policy meetings this year.